Amended in Assembly May 20, 2015

Amended in Assembly May 5, 2015

Amended in Assembly April 23, 2015

Amended in Assembly April 20, 2015

Amended in Assembly March 26, 2015

California Legislature—2015–16 Regular Session

Assembly Bill No. 34

Introduced by Assembly Members Bonta and Jones-Sawyer

December 1, 2014

An act to amend Sections 2220.05, 2242, and 2264 of, and to add Chapter 18 (commencing with Section 26000) to Division 9 of, the Business and Professions Code, to add Section 23028 to the Government Code, to amend Section 11362.775 of the Health and Safety Code, and to add Sections 147.5 and 3094 to the Labor Code, relating to medical cannabis, and making an appropriation therefor.

LEGISLATIVE COUNSEL’S DIGEST

AB 34, as amended, Bonta. Medical cannabis regulation and enforcement.

(1) Existing law, the Compassionate Use Act of 1996, an initiative measure enacted by the approval of Proposition 215 at the November 5, 1996, statewide general election, authorizes the use of marijuana for medical purposes.

Existing law enacted by the Legislature, commonly referred to as the Medical Marijuana Program Act (MMPA), requires the establishment of a program for the issuance of identification cards to qualified patients so that they may use marijuana for medical purposes without arrest or prosecution under specified state law, and requires the establishment of guidelines for the lawful cultivation of marijuana grown for medical use.

This bill would enact the Medical Cannabis Regulation and Control Act and would establish the Division of Medical Cannabis Regulation and Enforcement within the Department of Alcoholic Beverage Control, the Division of Medical Cannabis Manufacturing and Testing within the State Department of Public Health, and the Division of Medical Cannabis Cultivation within the Department of Food and Agriculture and would set forth the duties of the respective regulatory authorities.

The bill would, 180 days after the division posts a specified notice on its Internet Web site, make those provisions of the MMPA that prohibit prosecution of qualified patients, persons with valid identification cards, and designated primary caregivers who associate in California, collectively or cooperatively, to cultivate marijuana for medical purposes, inapplicable to licensees. The bill would, thereafter, permit a dispensary to provide patients with medical marijuana and medical marijuana products obtained only from persons licensed under this bill.

The bill would require the regulatory authorities to license persons to engage in the various aspects of commercial cannabis activity, as defined. The bill would designate as peace officers specified officers and employees of the regulatory authorities. The bill would prescribe requirements for the issuance, renewal, suspension, and revocation of a mandatory commercial license and would authorize the assessment of related fees. begin insert This bill would require medical cannabis and medical cannabis products to be adhere to specified packaging, labeling, and food safety standards. end insert

The bill would not preclude a city or county from adopting a local ordinance, not consistent with this bill, that regulates the location, operation, or establishment of a licensee or prohibits commercial cannabis activity within its jurisdiction. The bill would require state agencies to collaborate with local begin delete agencies, and would require local agencies to, within the scope of their jurisdiction, assist state agencies in the enforcement of the bill. end delete begin insert agencies to enforce the act, to the extent that it is within the scope of other statuary responsibilities of local agencies and to the extent that resources are available to the local agencies. end insert By imposing these enforcement duties on local agencies, the bill would impose a state-mandated local program.

The bill would establish the Medical begin delete Cannibis end delete begin insert Cannabis end insert Control Fund with separate accounts for begin delete fees end delete begin insert fees, fines, end insert and for penalties, and would require deposit of fees and penalties into their respective accounts within the fund. The bill would continuously appropriate moneys within the fees account to the appropriate regulating authorities for the purposes of administering the program.

The bill would authorize the regulatory authorities to collaborate to establish a regulation and enforcement assistance grant program and would begin delete authorize the Department of Transportation to conduct research and end delete begin insert require the Department of the California Highway Patrol to end insert develop protocols regarding determining whether a driver is operating a vehicle under the influence of marijuana to assist law enforcement agencies. The bill would make begin delete the end delete begin insert specified end insert fines and penalties deposited into the fund available, upon appropriation by the Legislature, for funding these programs.

The bill would require the regulatory authorities, as soon as practicable, to allow qualified applicants for licensure to apply for and receive a provisional license to engage in commercial cannabis activity and to adopt emergency regulations for that purpose.

The bill would require the regulatory authorities to adopt regulations necessary for the implementation and enforcement of this bill in consultation with prescribed state agencies relating to environmental, agricultural, consumer protection, worker safety, and food and product safety requirements. The bill would authorize the regulatory authorities to enter into interagency agreements to pay, from fees deposited into the fund, the associated costs incurred by these state agencies.

The bill would establish a cannabis employee certification, training, and apprenticeship program for cultivation sites and dispensaries, as defined. The bill would require the Division of Labor Standards Enforcement to maintain and enforce minimum standards for the competency and training of employees and to certify cannabis employees. The bill would require the Division of Occupational Safety and Health by January 1, 2017, to convene an advisory committee to evaluate whether there is a need to develop industry-specific regulations related to the activities of licensed facilities. The bill would require the advisory committee to present to the Occupational Safety and Health Standards Board its findings and recommendations for consideration by the board, and would require the board, by July 1, 2017, to render a decision regarding the adoption of industry-specific regulations.

The bill would require a licensee to keep various records in connections with commercial cannabis activities and would prescribe requirements for making records available to the division and any state or local agency. The bill would prohibit the disclosure of certain patient and caregiver information pursuant to the California Public Records Act.

The bill would declare that it does not apply to, or diminish the protections granted to, a patient or primary caregiver acting pursuant to the Compassionate Use Act of 1996 and would exempt these parties from the application of the act.

The bill would declare that the actions of a licensee or provisional licensee, its employees, and its agents that are within the scope of a valid license are not unlawful under state law, as specified. The bill would provide similar state law immunity for a property owner who allows his or her property to be used by a licensee or provisional licensee.

The bill would require the regulatory authorities to work in conjunction with law enforcement entities throughout the state to implement and enforce the rules and regulations regarding medical cannabis and to take appropriate action against businesses and individuals that fail to comply with the law.

The bill would authorize the director of any regulatory authority, and prescribed local entities, to bring an action to enjoin violations. The bill would require the regulatory authority to establish a digital database and to permit state and local law enforcement agencies to verify licenses.

(2) Existing law, the Medical Practice Act, establishes the Medical Board of California and sets forth its powers and duties, including, but not limited to the licensing and regulation of physicians and surgeons. Existing law sets forth the conduct that would constitute unprofessional conduct for a physician and surgeon, including, but not limited to, prescribing certain drugs without an appropriate examination or medical indication. Existing law generally makes a violation of these provisions a misdemeanor.

This bill would specify that recommending marijuana to patients without an appropriate prior examination and a medical indication is unprofessional conduct.

The bill would provide that specified acts of recommending marijuana without a good faith examination are among the types of cases that should be given priority for investigation and prosecution by the Medical Board of California, as described above. The bill would deem as unprofessional conduct a physician and surgeon being employed by, or entering into an agreement with, a medical cannabis licensee to provide recommendations for medical marijuana.

By broadening the definition of a crime, the bill would impose a state-mandated local program.

(3) Existing law authorizes the board of supervisors of a county and the governing body of a city to impose various taxes, including a transactions and use tax at a rate of 0.125%, or a multiple thereof, if approved by the required vote of the board or governing body and the required vote of qualified voters, and limits the combined rate of transactions and use taxes within a city or county to 2%.

This bill would authorize the board of supervisors of a county begin insert or a city council end insert to impose, by ordinance, a tax on the privilege of cultivating, dispensing, producing, processing, preparing, storing, providing, donating, selling, or distributing cannabis or cannabis products, including a transactions and use tax at any rate specified by the board. The bill would authorize the tax to be imposed for either general or specific governmental purposes. The bill would require a tax imposed pursuant to this authority to be subject to any applicable voter approval requirement.

(4) This bill would specify that its provisions are severable.

(5) Existing constitutional provisions require that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest.

This bill would make legislative findings to that effect.

(6) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that with regard to certain mandates no reimbursement is required by this act for a specified reason.

With regard to any other mandates, this bill would provide that, if the Commission on State Mandates determines that the bill contains costs so mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.

Vote: majority. Appropriation: yes. Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

SECTION 1.  

The Legislature finds and declares all of the
following:

(a) The people of California enacted the Compassionate Use
Act of 1996 to ensure that seriously ill Californians have access
to marijuana for medical purposes. The Compassionate Use Act
of 1996 urged the state and federal governments to implement a
plan to provide for the safe and affordable distribution of medical
marijuana to all patients in medical need of the drug.

(b) Under federal law, marijuana is a Schedule 1 drug. Its
placement in that schedule is based upon a finding that marijuana
has no currently accepted medical use. That finding, if correct at
the time it was made, is no longer accurate. California, exercising
its traditional power to regulate the practice of medicine, has
determined that marijuana has a significant role to play.

(c) California, acting alone, is powerless to change federal law
and to correct this misunderstanding in federal law about the role
that marijuana can and does play in the practice of medicine.
However, federal enforcement authorities have recognized that in
states that have authorized marijuana use and have enacted strong
and effective regulatory and enforcement systems to control the
cultivation, distribution, sale, and possession of marijuana, conduct
in compliance with those regulatory and enforcement systems is
less likely to threaten federal priorities and, thus, less likely to
require federal enforcement intervention (See: Memorandum For
All United States Attorneys--Guidance Regarding Marijuana
Enforcement, by James M. Cole, Deputy Attorney General, August
29, 2013).

(d) The purpose of this act is to establish for California a robust
medical cannabis regulatory and enforcement system to ensure
that conduct in compliance with California’s medical marijuana
laws does not threaten the federal priorities as set forth in the James
M. Cole memorandum, and, therefore, does not require federal
enforcement intervention.

begin insert

(e) Nothing in this act or Article 2 (commencing with Section
11357) or Article 2.5 (commencing with Section 11362.7) of
Chapter 6 of Division 10 of the Health and Safety Code is intended
to preempt any local ordinance regulating or banning the
cultivation, processing, manufacturing, testing, transportation,
distribution, provision, donation, or sale of medical cannabis, or
to otherwise prevent or limit a city, county, or city and county from
adopting or enforcing a zoning ordinance or other law, ordinance,
or regulation that bans or regulates the location, operation, or
establishment of any individual or other person that cultivates,
processes, possesses, stores, manufactures, tests, transports,
distributes, provides, donate, or sells cannabis.

end insert begin insert

(f) Nothing in this act is intended to require an employer to
permit or accommodate the use, consumption, possession, transfer,
display, transportation, sale, or growth of marijuana in the
workplace, or to affect the ability of employers to have policies
restricting the use of marijuana by employees, or otherwise
complying with federal law.

end insert

SEC. 2.  

Section 2220.05 of the Business and Professions Code
is amended to read:

2220.05.  

(a) In order to ensure that its resources are maximized
for the protection of the public, the Medical Board of California
shall prioritize its investigative and prosecutorial resources to
ensure that physicians and surgeons representing the greatest threat
of harm are identified and disciplined expeditiously. Cases
involving any of the following allegations shall be handled on a
priority basis, as follows, with the highest priority being given to
cases in the first paragraph:

(1) Gross negligence, incompetence, or repeated negligent acts
that involve death or serious bodily injury to one or more patients,
such that the physician and surgeon represents a danger to the
public.

(2) Drug or alcohol abuse by a physician and surgeon involving
death or serious bodily injury to a patient.

(3) Repeated acts of clearly excessive prescribing, furnishing,
or administering of controlled substances, or repeated acts of
prescribing, dispensing, or furnishing of controlled substances, or
recommending marijuana to patients for medical purposes, without
a good faith prior examination of the patient and medical reason
therefor. However, in no event shall a physician and surgeon
prescribing, furnishing, or administering controlled substances for
intractable pain consistent with lawful prescribing, including, but
not limited to, Sections 725, 2241.5, and 2241.6 of this code and
Sections 11159.2 and 124961 of the Health and Safety Code, be
prosecuted for excessive prescribing and prompt review of the
applicability of these provisions shall be made in any complaint
that may implicate these provisions.

(4) Sexual misconduct with one or more patients during a course
of treatment or an examination.

(5) Practicing medicine while under the influence of drugs or
alcohol.

(b) The board may by regulation prioritize cases involving an
allegation of conduct that is not described in subdivision (a). Those
cases prioritized by regulation shall not be assigned a priority equal
to or higher than the priorities established in subdivision (a).

(c) The Medical Board of California shall indicate in its annual
report mandated by Section 2312 the number of temporary
restraining orders, interim suspension orders, and disciplinary
actions that are taken in each priority category specified in
subdivisions (a) and (b).

SEC. 3.  

Section 2242 of the Business and Professions Code is
amended to read:

2242.  

(a) Prescribing, dispensing, or furnishing dangerous
drugs as defined in Section 4022 without an appropriate prior
examination and a medical indication, constitutes unprofessional
conduct. Prescribing or recommending marijuana to a patient for
a medical purpose without an appropriate prior examination and
a medical indication constitutes unprofessional conduct.

(b) No licensee shall be found to have committed unprofessional
conduct within the meaning of this section if, at the time the drugs
were prescribed, dispensed, or furnished, any of the following
applies:

(1) The licensee was a designated physician and surgeon or
podiatrist serving in the absence of the patient’s physician and
surgeon or podiatrist, as the case may be, and if the drugs were
prescribed, dispensed, or furnished only as necessary to maintain
the patient until the return of his or her practitioner, but in any case
no longer than 72 hours.

(2) The licensee transmitted the order for the drugs to a
registered nurse or to a licensed vocational nurse in an inpatient
facility, and if both of the following conditions exist:

(A) The practitioner had consulted with the registered nurse or
licensed vocational nurse who had reviewed the patient’s records.

(B) The practitioner was designated as the practitioner to serve
in the absence of the patient’s physician and surgeon or podiatrist,
as the case may be.

(3) The licensee was a designated practitioner serving in the
absence of the patient’s physician and surgeon or podiatrist, as the
case may be, and was in possession of or had utilized the patient’s
records and ordered the renewal of a medically indicated
prescription for an amount not exceeding the original prescription
in strength or amount or for more than one refill.

(4) The licensee was acting in accordance with Section 120582
of the Health and Safety Code.

SEC. 4.  

Section 2264 of the Business and Professions Code is
amended to read:

2264.  

The employing, directly or indirectly, the aiding, or the
abetting of any unlicensed person or any suspended, revoked, or
unlicensed practitioner to engage in the practice of medicine or
any other mode of treating the sick or afflicted which requires a
license to practice constitutes unprofessional conduct. Employment
by, or other agreement with, a mandatory commercial licensee
acting pursuant to the Medical Cannabis Regulation and Control
Act or a dispensary to provide recommendations for medical
marijuana constitutes unprofessional conduct.

SEC. 5.  

Chapter 18 (commencing with Section 26000) is added
to Division 9 of the Business and Professions Code, to read:

 

Chapter  18. Medical Cannabis Regulation and Control

 

Article 1.  General Provisions

 

26000.  

(a) This chapter shall be known, and may be cited, as
the Medical Cannabis Regulation and Control Act.

(b) It is the intent of the Legislature in enacting this chapter to
provide for the statewide regulation of the commercial cannabis
activity and the enforcement of laws relating to commercial
cannabis activities without preempting city or county ordinances
regulating or banning these activities. This chapter is an exercise
of the police powers of the state for the protection of the safety,
welfare, health, peace, and morals of the people of the state.

begin insert

(c) Nothing in this chapter, or any regulations promulgated
thereunder, shall be deemed to limit the authority or remedies of
a city or county under any provision of law, including, without
limitation, Section 26010 or 26060 or Section 7 of Article XI of
the California Constitution.

end insert

26001.  

Without limiting the authority of a city or county
pursuant to Section 7 of Article XI of the California Constitution,
or any other provision of law, and subject to that authority, the
state shall have the primary right and power to regulate and license
persons for the cultivation, manufacture, transportation, sale, and
other related activities regarding medical cannabis within the state.
In the exercise of these rights and powers, the state and each of its
agencies are hereby deemed not to be engaged in activities
requiring licensure under this chapter.

26002.  

For the purpose of this chapter:

(a) “Regulatory authority” means the Division of Medical
Cannabis Regulation and Enforcement within the Department of
Alcoholic Beverage Control, the Division of Medical Cannabis
Manufacturing and Testing within the State Department of Public
Health, or the Division of Medical Cannabis Cultivation within
the Department of Food and Agriculture, as appropriate to the
context.

(b) “Regulatory director” means the Director of the Department
of Alcoholic Beverage Control, the Director of the Department of
Public Health, or the Director of the Department of Food and
Agriculture.

(c) “Division” means the Division of Medical Cannabis
Regulation and Enforcement within the Department of Alcoholic
Beverage Control, unless otherwise specified.

(d) “Cannabis” means all parts of the plant Cannabis sativa L.,
cannabis indica, or cannabis ruderalis, whether growing or not;
the seeds thereof; the resin, whether crude or purified, extracted
from any part of the plant; and every compound, manufacture, salt,
derivative, mixture, or preparation of the plant, its seeds, or resin.
It does not include the mature stalks of the plant, fiber produced
from the stalks, oil or cake made from the seeds of the plant, any
other compound, manufacture, salt, derivative, mixture, or
preparation of the mature stalks (except the resin extracted
therefrom), fiber, oil, or cake, or the sterilized seed of the plant
which is incapable of germination. “Cannabis” also means
marijuana as defined by Section 11018 of the Health and Safety
Code as enacted by Chapter 1407 of the Statutes of 1972.

(e) “Commercial cannabis activity” means any cultivation,
possession, manufacture, processing, storing, laboratory testing,
labeling, transporting, distribution, or sale of cannabis or cannabis
product, begin insert or any Internet platform that facilitates any of these
functions for the purpose of selling medical cannabis or medical
cannabis products to qualified patients or caregivers, end insert except as
set forth in subdivision (b) of Section 26052.

(f) “Medical begin insert cannabis,” “medical end insert cannabis product,” “medical
marijuana product,” or “cannabis product” means any product
containing cannabis, including, but not limited to, concentrates
and extractions intended to be sold for use by medical marijuana
patients in California pursuant to the Compassionate Use Act of
1996 (Proposition 215).

(g) “Manufactured cannabis” means raw marijuana that has
undergone a process whereby the raw agricultural product has
been transformed into a concentrate, an edible product, or a topical
product.

(h) “Cannabis concentrate” means manufactured cannabis that
has undergone a process to concentrate the begin delete tetrahydrocannabinol end delete
begin insert cannabinoid end insert active ingredient, thereby increasing the product’s
potency.

(i) “Cannabinoid” means a chemical compound that is unique
to and derived from cannabis, also known as phytocannabinoid.

(j) “Edible cannabis product” means manufactured cannabis
that is intended to be used, in whole or in part, for human
consumption, including, but not limited to, chewing gum.

(k) “Topical cannabis” means manufactured product intended
for external use.

(l) “Identification program” means the universal identification
certificate program for licensees.

(m) “Mandatory commercial license” or “license” means a
mandatory commercial license issued pursuant to Article 3
(commencing with Section 26040).

(n) “Licensee” means any person licensed under this chapter to
engage in commercial cannabis activity related to medical cannabis
or medical cannabis products as set forth in this chapter.

(o) “Dispensary” means a begin insert nonmobile, nonvehicular,
non-Internet- based end insert retail location that distributes begin insert medical end insert cannabis
or medical cannabis products and is owned and operated by a
licensee for these activities pursuant to this chapter.

(p) “Testing and labeling” means a labeling and quality
assurance plan that addresses all of the following:

(1) Potency.

(2) Chemical residue.

(3) Microbiological contaminants.

(4) Handling, care, and storage.

(5) Date and location of cultivation, processing, and
manufacturing.

(q) “Fund” means the Medical Cannabis Control Fund
established pursuant to Section 26028.

(r) “Person” means any individual, firm, partnership, joint
venture, association, corporation, limited liability company, estate,
trust, business trust, receiver, syndicate, or any other group or
combination acting as a unit and includes the plural as well as the
singular number.

(s) “Cultivation site” means a location that grows begin insert medical end insert
cannabis begin delete or medical cannabis products end delete and is owned and operated
by a licensee for these activities pursuant to this chapter, including
a nursery.

(t) “Nursery” means a licensee that produces only clones,
immature plants, seeds, and other agricultural products used
specifically for the planting, propagation, and cultivation of medical
cannabis.

(u) “Cultivation” means any activity involving the planting,
growing, harvesting, drying, processing, or trimming of cannabis.

(v) “Dispensing” means any activity involving the retail sale of
medical cannabis or medical cannabis begin delete products. end delete begin insert products from a
dispensary. end insert

begin insert

(w) “Labor peace agreement” means an agreement between a
licensee and a bona fide labor organization that, at a minimum,
protects the state’s proprietary interests by prohibiting labor
organizations and members from engaging in picketing, work
stoppages, boycotts, and any other economic interference with the
applicant’s business. This agreement means that the applicant has
agreed not to disrupt efforts by the bona fide labor organization
to communicate with, and attempt to organize and represent, the
applicant’s employees. The agreement shall provide a bona fide
labor organization access at reasonable times to areas in which
the applicant’s employees work, for the purpose of meeting with
employees to discuss their right to representation, employment
rights under state law, and terms and conditions of employment.
This type of agreement shall not mandate a particular method of
election or certification of the bona fide labor organization.

end insert begin insert

(x) “Manufacturing site” means a location that conducts the
production, preparation, propagation, compounding, or processing
of medical cannabis or medical cannabis products, either directly
or indirectly or by extraction processes, or independently by means
of chemical synthesis or by a combination of extraction and
chemical synthesis, and includes a location that packages or
repackages medical cannabis or medical cannabis products or
labeling or relabeling of its container, and is owned and operated
by a licensee for these activities pursuant to this chapter.

end insert begin insert

(y) “Transport” means the commercial transfer of medical
cannabis or medical cannabis products from the business location
of one mandatory commercial licensee to another mandatory
commercial licensee, for the purposes of conducting commercial
cannabis activity authorized by licensees pursuant to this chapter.

end insert begin insert

(z) “Delivery” means the commercial transfer of medical
cannabis or medical cannabis products from a dispensary to a
primary caregiver or qualified patient, as defined in Section
11362.7 of the Health and Safety Code.

end insert begin insert

(aa) “Live plants” means living medical cannabis flowers and
plants, including seeds, immature plants, and vegetative stage
plants.

end insert begin insert

(ab) “Dried flower” means all dead medical cannabis that has
been harvested, dried, cured, or otherwise processed.

end insert

26010.  

This chapter does not, nor does Article 2 (commencing
with Section 11357) and Article 2.5 (commencing with Section
11362.7) of Chapter 6 of Division 10 of the Health and Safety
Code, prevent a city or county from doing any of the following:

(a) Adopting local ordinances inconsistent with this chapter that
do the following:

(1) Regulate the location, operation, or establishment of a
licensee or any person that cultivates, processes, possesses, stores,
manufactures, tests, transports, distributes, or sells medical
cannabis.

(2) Prohibit commercial cannabis activity within their
jurisdiction.

(b) The administrative, civil, or criminal enforcement of the
ordinances described in subdivision (a).

(c) Establishing a fee or tax for the operation of a licensee within
its jurisdiction.

(d) Enacting and enforcing other laws or ordinances pursuant
to the authority granted by Section 7 of Article XI of the California
Constitution.

begin insert

begin insert 26011. end insert   

(a) All manufactured medical cannabis and medical
cannabis products shall be packaged and labeled, and shall adhere
to labeling and packaging standards, including, but not limited
to, all of the following:

(1) All labels shall include the manufacturing date, the name
of the mandatory commercial licensee from which it was obtained,
the active ingredients, net weight, cannabinoid profile, nutritional
facts, any potential allergens, and the amount in milligrams of
cannabinoids per serving, servings per package, and the amount
in milligrams of cannabinoids in the total package.

(2) All labels shall include the warnings: “KEEP OUT OF
REACH OF CHILDREN AND ANIMALS,” and “FOR MEDICAL
USE ONLY.”

(3) All packaging shall contain a clear indication in bold font
that the package contains medical cannabis.

(4) All packages shall not be designed in a manner that attracts
minors.

(5) All labels shall clearly distinguish edible cannabis products
from noncannabis products.

(6) All packages shall show the name of the mandatory
commercial licensee that tested the product, the testing batch
number, and the date the test was completed.

(b) All medical cannabis and medical cannabis products shall
abide by consumer protection, food and product safety
requirements, including, but not limited to, all of the following:

(1) All manufacturers of medical cannabis and medical cannabis
products shall abide by sanitation standards equivalent to the
California Retail Food Code (Part 7 (commencing with Section
113700) of Division 104 of the Health and Safety Code) for food
preparation, storage, handling, and sale of medical cannabis
products. For purposes of this chapter, edible medical cannabis
products are deemed to be unadulterated food products.

(2) All edible medical cannabis products shall be limited to
foods that are not potentially hazardous food as set forth in Section
114365.5 of the Health and Safety Code.

(3) All edible medical cannabis products shall be packaged at
the original point of preparation.

end insert

 

Article 2.  Administration

 

26020.  

(a) The Division of Medical Cannabis Regulation and
Enforcement is hereby established within the Department of
Alcoholic Beverage Control. The Division of Medical Cannabis
Regulation and Enforcement shall do all of the following:

(1) Be administered by a person who is appointed by the
begin delete Director of the Department of Alcoholic Beverage Control. end delete
begin insert Governor. end insert

(2) Administer this chapter, as it pertains to commercial cannabis
activity relating to dispensaries.

(3) Lead all state and local authorities regarding the tracking of
medical cannabis, medical cannabis products, and licensees
pursuant to this chapter.

(b) The Division of Medical Cannabis Manufacturing and
Testing is hereby established within the Department of Public
Health. The Division of Medical Cannabis Manufacturing and
Testing shall do all the following:

(1) Be administered by a person who is appointed by the begin delete State
Health Officer. end delete begin insert Governor. end insert

(2) Administer this chapter, as it pertains to manufacturing,
testing, and certification of testing laboratories for medical cannabis
and medical cannabis products.

(c) The Division of Medical Cannabis Cultivation is hereby
established within the Department of Food and Agriculture. The
Division of Medical Cannabis Cultivation shall do all of the
following:

(1) Be administered by a person who is appointed by the
begin delete Secretary of the Department of Food and Agriculture. end delete begin insert Governor. end insert

(2) Administer this chapter as it pertains to cultivation of medical
cannabis.

(d) The regulatory authorities shall issue licenses to applicants
to engage in commercial cannabis activity pursuant to this chapter.
No person shall engage in commercial cannabis activity unless the
person obtains permission pursuant to begin delete section end delete begin insert Section end insert 26045.

(e) The division shall maintain a registry of all permit holders
and shall maintain a record of all licenses and commercial cannabis
activity of the permit holder throughout the length of licensure and
for a minimum of seven years following the expiration of each
license. The division shall make limited licensee information
available to a licensee so that it may verify whether it is engaging
in commercial cannabis activities with a properly licensed entity.

(f) Each regulatory authority shall adopt regulations as needed
to implement that licensing program as set forth in Article 3
(commencing with Section 26040) within one year following the
establishment of provisional licenses, pursuant to Section 26054.
The regulations shall not limit the authority of a city or a county
pursuant to Section 7 of Article XI of the California Constitution,
Section 26010 or 26060, or any other law. The regulations shall,
in addition, do all of the following:

(1) Establish a scale of application, licensing, and renewal fees,
based upon the cost of enforcing this chapter, as follows:

(A) Each regulatory authority shall charge each applicant for
licensure or renewal an application or renewal fee that shall be
calculated to cover the costs of processing the application or
renewal. This fee may vary depending upon the varying costs
associated with approving the application or renewal related to the
varying activities covered by the license, but shall not exceed the
reasonable regulatory costs to the regulatory authority.

(B) Each regulatory authority shall charge each licensee a
licensure fee upon the issuance of a license. The licensure fee shall
be calculated to cover the costs of administering this chapter, other
than the costs of processing applications. The licensure fee may
vary depending upon the varying costs associated with
administering the various regulatory requirements of this chapter
as they relate to the nature and scope of the different licensure
activities, but shall not exceed the reasonable regulatory costs to
the regulatory authority.

(C) The total fees assessed pursuant to this chapter, including,
but not limited to, provisional license fees set forth in Section
26054, shall be set at an amount that will fairly and proportionately
generate sufficient total revenue to fully cover the total costs of
administering this chapter, including, but not limited to, costs set
forth in Section 26023.

(2) Establish procedures for approval or denial of applications
for licensure for each and every aspect of commercial cannabis
activity, including, but not limited to, cultivation, possession,
manufacture, processing, storing, laboratory testing, labeling,
transporting, distribution, and sale of cannabis.

(3) Establish applicant qualifications.

(4) Establish licensee employee qualifications, including, but
not limited to, training and screening requirements.

(5) Establish licensee security requirements, including, but not
limited to, procedures to limit access to facilities and to prevent
diversion of product to nonmedical use.

(6) Establish procedures and protocols for identifying, managing,
and disposing of contaminated, adulterated, deteriorated, or excess
product.

(7) Establish advertising, marketing, signage, and labeling
requirements and restrictions.

(8) Establish procedures for the suspension, revocation, or
surrender of a license and establishing related fines and penalties
to be assessed against licensees for violations of this chapter.

(9) Establish procedures for the begin insert collaborative end insert oversight of the
begin delete fund end delete begin insert fund, and its related accounts, end insert established pursuant to Section
26028.

begin insert

begin insert 26020.1. end insert   

(a) The regulatory authorities, by March 1, 2016,
shall convene a task force which shall advise the regulatory
authorities on the development of standards pursuant to this
chapter. The task force shall be responsible for determining the
appropriate roles of each state entity as it pertains to this chapter,
and shall establish clear guidelines on communication and
information sharing between state entities for implementation of
this chapter. Notwithstanding Section 10231.5 of the Government
Code, the task force shall submit a report on these standards,
determinations, and guidelines for implementation of this chapter,
to the Legislature and state entities affected by this chapter by
August 1, 2016. The report submitted to the Legislature shall be
submitted in compliance with Section 9795 of the Government
Code.

(b) The task force shall be comprised of representatives of
medical cannabis consumer advocates, environmental experts,
public health experts, medical cannabis industry representatives,
the related regulatory authorities, labor, and law enforcement.
The task force may also be comprised of representatives for the
State Board of Equalization and Attorney General, and other state
agencies, as deemed appropriate. The task force shall have a
minimum of nine members, with one-third of the members
appointed by the California State Assembly, one-third of the
members appointed by the California State Senate, and one-third
of the members appointed by the Governor. If there is an unequal
divide between these three entities, the Governor shall make
appointments for the difference.

(c) Task force members shall serve on a voluntary basis and
shall be responsible for any costs associated with their
participation in the task force. The regulatory authorities shall
not be responsible for travel costs incurred by task force members
or otherwise compensating task force members for costs associated
with their participation in the task force.

end insert

26021.  

begin insert For purposes of this chapter, the Secretary of the
California Department of Food and Agriculture shall declare
medical cannabis to be an agricultural product. end insert The Division of
Medical Cannabis Cultivation shall do all of the following:

(a) Adopt regulations, in consultation with the State Water
Resources Control Board, to ensure that commercial cannabis
activity licensed pursuant to this chapter does not threaten the
state’s clean water and environment.

(b) Adopt regulations ensuring that the cultivation of cannabis
under this chapter is in compliance with standards equivalent to
the statutory and regulatory requirements applicable to the
production of a food crop, including, but not limited to, all of the
following:

(1) Regulations regarding the verification of cannabis stock for
the purposes of cultivation.

(2) Cultivation protocols ensuring the quality, availability, and
safety of the cannabis crop, including both indoor and outdoor
cultivation standards and regulations regarding carbon offsets for
indoor cultivation.

(3) Environmentally sound agricultural practices, including all
of the following:

(A) A requirement that any actual, or potential for,
environmental damage be addressed by the relevant state agency,
including, but not limited to, the State Board of Forestry and Fire
Protection, the Department of Fish and Wildlife, California regional
water quality control boards, the Department of the California
Highway Patrol, or the Department of Justice.

(B) A provision authorizing begin insert suspension or end insert revocation of a
licensee if the state determines that the conduct of the licensee
threatens to inflict or has inflicted significant damage to the
environment.

(C) Standards controlling the application of pesticides. These
standards shall, at a minimum, require that if pesticides are to be
used, the use comply with standards equivalent to Division 6
(commencing with Section 11401) of the Food and Agricultural
Code and its implementing begin delete regulations. end delete begin insert regulations, in compliance
with federal law. end insert

(c) Adopt regulations to establish cultivation labeling and
packaging standards and requirements, including, but not limited
to, cultivation labeling requirements requiring labeling to include,
at a minimum, cannabinoid levels, cannabinoid profile, and active
ingredients.

(d) In consultation with the State Department of Public Health,
establish testing standards for medical cannabis.

(e) Ensure cultivation begin delete licenses end delete begin insert licensees end insert have access to existing
agricultural incentive and support programs.

(f) Establish weighing or measuring standards, including, but
not limited to, the requirement that devices used in connection
with the sale or distribution of cannabis meet standards equivalent
to Division 5 (commencing with Section 12001).

begin delete

(g) Establish standards controlling the application of pesticides.
These standards shall, at a minimum, require that if pesticides are
to be used, the use comply with standards equivalent to Division
6 (commencing with Section 11401) of the Food and Agricultural
Code and its implementing regulations.

end delete begin insert

(g) Assess an administrative fine upon a licensee for each
violation of any regulation promulgated pursuant to subdivision
(a) to (c), inclusive, in an amount equal to the costs to remedy any
environmental damage caused by the violation or violations.

end insert begin insert

(h) In consultation with other regulatory authorities, establish
transportation and delivery standards for manufactured medical
cannabis and medical cannabis products, including standards
related to the transport and delivery of perishable and
nonperishable medical cannabis and medical cannabis products.

end insert begin insert

(i) Adopt any other regulations necessary to fully implement
the provisions of this chapter related to the cultivation of medical
cannabis.

end insert

26021.5.  

(a) State agencies shall collaborate with local
begin delete agencies, and local agencies, within the scope of their jurisdiction,
and to the extent that resources are available, shall assist state
agencies in the enforcement of this chapter. end delete begin insert agencies to enforce
this chapter to the extent that it is within the scope of other
statutory responsibilities of local agencies and to the extent that
resources for this enforcement are available to the local agencies. end insert
This section shall not limit any other state or local requirements.

(b)  begin delete No cannabis shall end delete begin insert Cannabis shall not end insert be cultivated on public
lands pursuant to this chapter.

26022.  

The Division of Medical Cannabis Manufacturing and
Testing shall adopt regulations begin delete to do end delete begin insert for end insert all of the following:

begin delete

(a) Establish product labeling and packaging standards and
requirements, including, but shall not be limited to, all of the
following:

(1) All manufactured cannabis product labeling and packaging
standards, including, but not limited to, all of the following:

(A) A requirement that the label include the manufacturing date,
the name of the mandatory commercial licensee from which it was
obtained, the active ingredients, net weight, cannabinoid profile,
nutritional facts, any potential allergens, and the amount in
milligrams of cannabinoids per serving, servings per package, and
the amount in milligrams of cannabinoids in the total package.

(B) A requirement that the label include the warnings: “KEEP
OUT OF REACH OF CHILDREN AND ANIMALS,” and “FOR
MEDICAL USE ONLY.”

(C) A requirement that packaging contain a clear indication in
bold font that the package contains medical cannabis, and that the
package not be designed in a manner that attracts minors.

(D) Standards for labeling food that clearly distinguish edible
cannabis products from non-cannabis products.

(E) The name of the mandatory commercial licensee that
manufactured the product.

(b) Establish consumer protection, food and product safety
requirements, including, but not limited to, all of the following:

(1) Adverse event reporting and product recall systems that
include batch, lot, or control number tracking, the requirement that
employees who manufacture or otherwise handle edible medical
cannabis products thoroughly wash their hands before commencing
production and before handling finished edible medical cannabis
products.

(2) Standards for the amount, in milligrams, of cannabinoids
per serving in edible products.

(3) Sanitation standards equivalent to the California Retail Food
Code (Part 7 (commencing with Section 113700) of Division 104
of the Health and Safety Code) for food preparation, storage,
handling, and sale of medical cannabis products. For purposes of
this chapter, edible medical cannabis products are deemed to be
unadulterated food products.

(4) A requirement that edible medical cannabis products be
limited to foods that are not potentially hazardous food as set forth
in Section 114365.5 of the Health and Safety Code.

(5) Standards controlling the application of pesticides. These
standards shall, at a minimum, require that if pesticides are to be
used, the use comply with standards equivalent to Division 6
(commencing with Section 11401) of the Food and Agricultural
Code and its implementing regulations.

(6) A requirement that all edible medical cannabis products
shall be individually wrapped at the original point of preparation.

(c) Establish testing

end delete

begin insert (a) end insert begin insert   end insert begin insert Testing end insert requirements for all medical cannabis and medical
cannabis products, including edible cannabis products and those
used, or intended for use, via inhalation, including, but not limited
to:

(1) Testing for the active cannabinoid-profile, constituent
elements, and microbiological, bacterial, pathogenic yeast, and
mold counts.

(2) Testing standards by which to test and measure the potency
of medical cannabis and medical cannabis products. The Division
of Medical Cannabis Manufacturing and Testing shall also
determine maximum begin delete standards in the potency of medical cannabis
and end delete begin insert potency standards for end insert medical cannabis products.

(3) Testing standards by which to test and measure the quality
of the medical cannabis and medical cannabis product.

(4) Protocols for medical cannabis and medical cannabis product
safety testing.

begin delete

(d) Establish procedures

end delete

begin insert (b) end insert begin insert   end insert begin insert Procedures end insert for certifying laboratories for the testing of
medical cannabis and medical cannabis products, as defined in
this chapter. Certification of testing laboratories shall be consistent
with general requirements for the competence of testing and
calibration activities, including sampling, using standard methods
established by the International Organization for Standardization,
including, but not limited to, ISO/IEC 17020 and 17025. begin insert The
Department of Medical Cannabis Manufacturing and Testing may
use an outside accreditation body, approved by the International
Laboratory Accreditation Cooperation, to assist in certification
of laboratories. end insert

begin insert

(c) Consumer protection standards for manufactured medical
cannabis and medical cannabis products, including, but not limited
to, the following:

end insert begin insert

(1) Adverse event reporting and product recall systems that
include batch, lot, or control number tracking, and the requirement
that employees who manufacture or otherwise handle edible
medical cannabis products thoroughly wash their hands before
commencing production and before handling finished edible
medical cannabis products.

end insert begin insert

(2) Standards for the amount, in milligrams, of cannabinoids
per serving in edible products.

end insert begin insert

(d) Safety protocols and standards of protocol for all levels of
manufacturing medical cannabis and medical cannabis products.

end insert begin insert

(e) In consultation with other regulatory authorities,
transportation and delivery standards for manufactured medical
cannabis and medical cannabis products, including standards
related to the transport and delivery of perishable and
nonperishable medical cannabis and medical cannabis products.

end insert begin insert

(f) Any other regulations necessary to fully implement the
provisions of this chapter related to the manufacturing and testing
of medical cannabis and medical cannabis products.

end insert

begin insert

begin insert 26023. end insert   

The division shall adopt regulations for all of the
following:

(a) Minimum educational and testing requirements for
dispensary licensee staff, including, but not limited to, background
checks and a requirement that every dispensary maintain
dedicated, licensed security staff, as deemed appropriate by the
division.

(b) Inventory and control protocols.

(c) Protocols for the safe, secure storage of medical cannabis
and medical cannabis products by wholesale and dispensary
licensees.

(d) Maximum allowed storage for dispensaries and wholesale
sites of medical cannabis and medical cannabis products.

(e) In consultation with other regulatory authorities,
transportation and delivery standards for medical cannabis and
medical cannabis products, including standards related to the
transport and delivery of perishable and nonperishable medical
cannabis and medical cannabis products.

(f) Any other regulations necessary to fully implement the
provisions of this chapter related to the dispensing of medical
cannabis and medical cannabis products.

end insert

begin delete 26023. end delete
begin insert 26023.5 end insert   

The regulations shall set forth the inspection and
enforcement responsibilities of the Department of Alcohol and
Beverage Control, the State Department of Public Health, the
Division of Labor Standards Enforcement, the State Water
Resources Control Board, the State Department of Public Health,
and the Department of Food and Agriculture associated with this
chapter.

begin delete

26023.5.  

(a) Without limiting the authority of a city or a county
pursuant to Section 7 of Article XI of the California Constitution
or any other law, the Division of Medical Cannabis Regulation
and Enforcement shall adopt regulations regarding the minimum
standards for the operation of dispensaries. The regulations shall
establish all of the following:

(1) A requirement that dispensaries provide patients with
detailed written information about the contents of the cannabis
and medical cannabis products they obtain.

(2) Requirements for inventory control and reporting that require
all dispensaries to be able to demonstrate the present location,
amounts, and descriptions of all medical cannabis products from
the time of delivery to the dispensary until purchase by a qualified
patient or primary caregiver.

(3) Minimum educational and testing requirements for licensee
staff, including, but not limited to, background checks and a
requirement that every dispensary maintain dedicated, licensed
security staff as deemed appropriate by the division.

(4) Minimum standards governing signage and advertising for
dispensaries.

(b) Commencing 180 days after the division begins issuing
provisional licenses, a dispensary shall provide patients medical
cannabis and medical cannabis products obtained only from persons
licensed under this chapter.

(c) Out-of-state medical cannabis patients with current, valid
verification that they are allowed to receive medical cannabis
treatment within their home state may receive medical cannabis
treatment, including the ability to purchase medical cannabis from
licensed dispensaries within this state upon verification of the
documents by the dispensary, pursuant to protocols established by
the division.

end delete

26024.  

The regulatory authorities may assist state taxation
authorities in the development of uniform policies for the state
taxation of mandatory commercial licensees.

26028.  

(a) The Medical Cannabis Control Fund is hereby
established within the State Treasury. Notwithstanding Section
16305.7 of the Government Code, the fund shall include any
interest and dividends earned on the moneys in the fund.

(b) All begin insert license end insert fees collected begin insert by the Division of Medical
Cannabis Cultivation end insert pursuant to this chapter shall be deposited
into the begin delete fees account, end delete begin insert Medical Cannabis Cultivation Fees Account, end insert
which is hereby established within the fund. Notwithstanding
Section 13340 of the Government Code, all moneys within begin delete the
fees end delete begin insert this end insert account are hereby continuously appropriated, without
regard to fiscal year, to the begin delete appropriate regulatory authority end delete
begin insert Division of Medical Cannabis Cultivation end insert solely for the purposes
of fully funding and administering this chapter, including, but not
limited to, the costs incurred by the begin delete regulatory authority end delete begin insert Division
of Medical Cannabis Cultivation end insert for its administrative expenses
and costs and the costs of regulation as set forth in Section begin delete 26023. end delete
begin insert 26021. end insert

begin insert

(c) All administrative fines collected pursuant to subdivision
(g) of Section 26021 shall be deposited into the Environmental
Safety Account, which is hereby established within the fund, and
shall be available, upon appropriation by the Legislature, to the
Division of Medical Cannabis Cultivation for allocation to state
and local agencies and law enforcement to remedy the
environmental impacts of cannabis cultivation.

end insert begin insert

(d) All license fees collected by the Division of Medical
Cannabis Manufacturing and Testing pursuant to this chapter
shall be deposited into the Medical Cannabis Manufacturing Fees
Account, which is hereby established within the fund.
Notwithstanding Section 13340 of the Government Code, all
moneys within the Medical Cannabis Manufacturing Fees Account
are hereby continuously appropriated, without regard to fiscal
year to the Division of Medical Cannabis Manufacturing and
Testing, solely for the purposes of fully funding and administering
this chapter, including, but not limited to, the costs incurred by
the Division of Medical Cannabis Manufacturing and Testing for
its administrative expenses and costs and the costs of regulation
as set forth in Section 26022.

end insert begin insert

(e) All license fees collected by the division pursuant to this
chapter shall be deposited into the Medical Cannabis Retail Fees
Account, which is hereby established within the fund.
Notwithstanding Section 13340 of the Government Code, all
moneys within the Medical Cannabis Retail Fees Account are
hereby continuously appropriated, without regard to fiscal year,
to the division, solely for the purposes of fully funding and
administering this chapter, including, but not limited to, the costs
incurred by the division for its administrative expenses and costs
and the costs of regulation as set forth in Section 26023.

end insert begin delete

(c) All

end delete

begin insert (f) end insert begin insert   end insert begin insert Except as otherwise provided in subdivision (c) and in Section
26064, all end insert moneys collected pursuant to this chapter as a result of
fines or penalties imposed under this chapter shall be deposited
directly into the begin delete fines and penalties account, end delete begin insert Medical Cannabis
Cultivation Fines and Penalties Account, Medical Cannabis
Manufacturing Fines and Penalties Account, and Medical
Cannabis Retail Fines and Penalties Account, respectively, end insert which
begin delete is end delete begin insert are end insert hereby established within the fund, and shall be available,
upon appropriation by the Legislature, begin insert to the division, the Division
of Medical Cannabis Cultivation, and the Division of
Manufacturing and Testing, respectively, end insert for the purposes of
funding the enforcement grant program pursuant to subdivision
(d).

begin delete

(d) The regulatory authorities shall collaboratively

end delete

begin insert (g) end insert begin insert   end insert begin insert Each regulatory authority shall end insert establish and administer a
grant program to allocate moneys from the fines and penalties
account to state and local entities for the purpose of assisting with
medical cannabis regulation and the enforcement of this chapter
and other state and local laws applicable to begin delete licensees. end delete begin insert cannabis
activities. end insert The costs of the grant program under this subdivision
shall, upon appropriation by the Legislature, be paid for with
moneys in the fines and penalties account.

begin delete

(e)

end delete

begin insert (h) end insert  The begin delete Department of Transportation shall conduct research
regarding determining end delete begin insert Department of the California Highway
Patrol shall establish protocols to determine end insert whether a driver is
operating a vehicle under the influence of cannabis, and shall
develop protocols setting forth best practices to assist law
enforcement agencies. The costs of the begin delete Department of
Transportation end delete begin insert Department of the California Highway Patrol end insert under
this subdivision shall, upon appropriation by the Legislature, be
paid for with begin insert equal appropriations from end insert moneys in the fines and
penalties begin delete account. end delete begin insert accounts. end insert

begin delete

(f)

end delete

begin insert (i) end insert  The total fees charged pursuant to this chapter shall be
sufficient to pay the costs associated with the administrative and
enforcement duties of the begin delete division end delete begin insert regulatory authorities end insert and of
the associated state agencies in administering this chapter.

begin delete

(g)

end delete

begin insert (j) end insert  The regulatory authorities shall enter into an interagency
agreement with the Department of Alcohol and Beverage Control,
the Division of Labor Standards Enforcement, the begin delete Department of
Water Resources, end delete begin insert State Water Resources Control Board, end insert the State
Department of Public Health, and the Department of Food and
Agriculture setting forth the duties of those agencies under this
chapter and providing for reimbursement to the appropriate state
and local authorities of associated costs from revenues deposited
into the fees account of the fund.

26030.  

(a) The regulatory directors and the persons employed
by the regulatory authorities for the administration and enforcement
of this chapter are peace officers in the enforcement of the penal
provisions of this chapter, the rules of the division adopted under
this chapter, and any other penal provisions of law of this state
prohibiting or regulating the cultivation, processing, storing,
manufacturing, testing, transporting, or selling of medical cannabis,
and these persons are authorized, while acting as peace officers,
to enforce any penal provisions of state law while in the course of
their employment.

(b) The regulatory directors, the persons employed by the
regulatory authorities for the administration and enforcement of
this chapter, peace officers listed in Section 830.1 of the Penal
Code, and those officers listed in Section 830.6 of the Penal Code
while acting in the course and scope of their employment as peace
officers may, in enforcing this chapter, visit and inspect the
premises of any licensee at any time during which the licensee is
acting pursuant to the mandatory commercial license.

(c) Peace officers of the Department of the California Highway
Patrol, members of the University of California and California
State University police departments, and peace officers of the
Department of Parks and Recreation, as defined in subdivisions
(a), (b), (c), and (f) of Section 830.2 of the Penal Code, may, in
enforcing this chapter, visit and inspect the premises of any licensee
at any time during which the licensee is acting pursuant to the
license.

26034.  

(a) Information identifying the names of patients, their
medical conditions, or the names of their primary caregivers
received and contained in records kept by the regulatory authorities
for the purposes of administering this chapter are confidential and
shall not be disclosed pursuant to the California Public Records
Act (Chapter 3.5 (commencing with Section 6250) of Division 7
of Title 1 of the Government Code), except as necessary for
authorized employees of the State of California or any city or
county to perform official duties pursuant to this chapter, or a local
ordinance adopted in accordance with Section 26010.

(b) Nothing in this section precludes the following:

(1) Employees of any of the regulatory authorities notifying
state or local agencies about information submitted to the
regulatory authority that the employee suspects is falsified or
fraudulent.

(2) Notifications from any of the regulatory authorities to state
or local agencies about apparent violations of this chapter or any
applicable local ordinance.

(3) Verification of requests by state or local agencies to confirm
licenses and certificates issued by the regulatory authorities or
other state agency.

(4) Provision of information requested pursuant to a court order
or subpoena issued by a court or an administrative agency or local
governing body authorized by law to issue subpoenas.

(c) Information shall not be disclosed by any state or local
agency beyond what is necessary to achieve the goals of a specific
investigation, a notification, or the parameters of a specific court
order or subpoena.

26035.  

This begin delete chapter does end delete begin insert chapter and Article 2 (commencing
with Section 11357) and Article 2.5 (commencing with Section
11362.7) of Chapter 6 of Division 10 of the Health and Safety
Code do end insert not require an employer to permit or accommodate the
use, consumption, possession, transfer, display, transportation,
sale, or growth of cannabis in the workplace or begin delete to end delete affect the ability
of employers to have policies restricting the use of cannabis by
begin delete employees. end delete begin insert employees, or prevent employers from complying with
federal law. end insert

 

Article 3.  Mandatory Commercial License

 

26040.  

(a) The begin delete regulatory authorities shall adopt regulations
establishing a tiered licensing scheme to accommodate the different
levels and types of activity to be licensed, as follows: end delete begin insert following
licenses are allowable for commercial cannabis activity, pursuant
to an authorization by a regulatory authority: end insert

begin delete

(1) The Division of Medical Cannabis Cultivation shall adopt
regulations for a tiered licensing structure for the cultivation of
medical cannabis.

(2) The Division of Medical Cannabis Manufacturing and
Testing shall adopt regulations for the tiered licensing structure of
the following:

(A) Manufacturing of medical cannabis products.

(B) Testing of medical cannabis products.

(C) Certification of medical cannabis testing laboratories.

(3) The Division of Medical Cannabis Regulation and
Enforcement shall adopt regulations for the tiered licensing
structure for all the following:

(A) Wholesale of medical cannabis products, which shall include
large-scale storage and distribution, as defined by the regulatory
authority.

(B) Dispensing of medical cannabis products.

end delete begin insert

(1) Licenses authorized by the Division of Medical Cannabis
Cultivation are as follows:

end insert begin insert

(A) Type 1, or “specialty outdoor,” for outdoor cultivation of
less than 5,000 square feet of total area on one property. Maximum
of 50 mature plants on the property.

end insert begin insert

(B) Type 1A, or “specialty indoor,” for indoor cultivation of
less than 5,000 square feet of total area on one property. Maximum
of 50 mature plants on the property.

end insert begin insert

(C) Type 2, or “small outdoor,” for outdoor cultivation between
5,001 and 10,000 square feet of total area on one property.
Maximum of 99 mature plants on the property.

end insert begin insert

(D) Type 2A, or “small indoor,” for indoor cultivation between
5,001 and 10,000 square feet of total area on one property.
Maximum of 99 mature plants on the property.

end insert begin insert

(E) Type 3, or “medium outdoor,” for outdoor cultivation
between 10,001 and 30,000 square feet of total area on one
property. Maximum of 299 mature plants on the property. The
Division of Medical Cannabis Cultivation shall limit the number
of licenses allowed of this type.

end insert begin insert

(F) Type 3A, or “medium indoor,” for indoor cultivation
between 10,001 and 30,000 square feet of total area on one
property. Maximum of 299 mature plants on the property. The
Division of Medical Cannabis Cultivation shall limit the number
of licenses allowed of this type.

end insert begin insert

(G) Type 4, or “large outdoor,” for outdoor cultivation greater
than 30,001 square feet of total area on one property. Maximum
of 500 mature plants on the property. The Division of Medical
Cannabis Cultivation shall limit the number of licenses allowed
of this type.

end insert begin insert

(H) Type 5, or “nursery,” for cultivation of medical cannabis
solely as a nursery. Type 5 licensees may transport live plants.

end insert begin insert

(2) Licenses authorized by the Division of Medical Cannabis
Manufacturing and Testing are as follows:

end insert begin insert

(A) Type 6A, or “small manufacturing level 1,” for
manufacturing sites that use a maximum of ____ pounds of medical
cannabis each year to produce medical cannabis products, using
nonvolatile solvents.

end insert begin insert

(B) Type 6B, or “small manufacturing level 2,” for
manufacturing sites that use a maximum of ____ pounds of medical
cannabis each year to produce medical cannabis products, using
volatile solvents.

end insert begin insert

(C) Type 7A, or “large manufacturing level 1,” for
manufacturing sites that use a maximum of ____ pounds of medical
cannabis each year to produce medical cannabis products, using
nonvolatile solvents. The Division of Medical Cannabis
Manufacturing and Testing shall limit the number of licenses of
this type.

end insert begin insert

(D) Type 7B, or “large manufacturing level 2,” for
manufacturing sites that use a maximum of ____ pounds of medical
cannabis each year to produce medical cannabis products, using
volatile solvents. The Division of Medical Cannabis Manufacturing
and Testing shall limit the number of licenses of this type.

end insert begin insert

(E) Type 8, or “testing,” for testing of medical cannabis and
medical cannabis products. Type 8 licensees shall have their
facilities certified according to regulations set forth by the Division
of Medical Cannabis Manufacturing and Testing.

end insert begin insert

(3) Licenses authorized by the division are as follows:

end insert begin insert

(A) Type 9, or “wholesale,” for the storage of medical cannabis
or medical cannabis products. Maximum storage shall be two
pounds of dried flower or 200 individual units per medical
cannabis product.

end insert begin insert

(B) Type 10, or “small dispensary,” for dispensaries with 1-50
employees, including management.

end insert begin insert

(C) Type 10D, or “small dispensary-delivery,” for dispensaries
with the same restrictions as Type 10; also allows for delivery.

end insert begin insert

(D) Type 11, or “medium dispensary,” for dispensaries with
51-100 employees, including management.

end insert begin insert

(E) Type 11D, or “medium dispensary-delivery,” for
dispensaries with the same restrictions as Type 11; also allows
for delivery.

end insert begin insert

(F) Type 12, or “large dispensary,” for dispensaries with 100
employees or greater, including management.

end insert begin insert

(G) Type 12D, or “large dispensary-delivery,” for dispensaries
with the same restrictions as Type 12; also allows for delivery.

end insert begin insert

(4) (A) Licensees may only hold up to two separate license
categories, as follows:

end insert begin insert

(i) Type 1, 1A, and 5 licensees may apply for type 6A, 6A, 7A,
and 7B licenses or type 10, 11, 12 licenses.

end insert begin insert

(ii) Type 6A, 6A, 7A, and 7B licensees may apply for type 1, 1A,
and 5 licenses or type 10, 10D, 11, 11D, 12, and 12D licenses.

end insert begin insert

(iii) Type 10, 11, and 12 licensees may apply for type 1, 1A, and
5 licenses or type 6A, 6B, 7A, and 7B licenses.

end insert begin insert

(iv) Type 10D, 11D, and 12D licensees may apply for type 6A,
6B, 7A, and 7B licenses.

end insert begin insert

(B) Types 2, 2A, 3, 3A, 4, and 8 licensees shall not hold licenses
in any other category.

end insert begin insert

(C) Type 9 licensees may apply only for one additional license
from either the cultivation, manufacturing, or dispensing category.

end insert

(b) The begin delete regulations shall end delete begin insert regulatory authorities shall adopt
regulations to end insert set forth the application and licensure process,
including, but not limited to, all of the following:

(1) A description of the various specific forms of commercial
cannabis activity to be authorized by the various types of licenses.

(2) The establishment of license application, issuance, renewal,
suspension, surrender, and revocation procedures for the various
types of licenses to be issued.

(3) The procedures for the issuance, renewal, suspension, and
revocation of mandatory commercial licenses.

(4) Time periods, not to exceed 90 days, by which the division
shall approve or deny an application for mandatory commercial
licensure. The failure of the regulatory authority to act upon an
application for licensure within the time prescribed shall not be
deemed approval of the application.

(5) Qualifications for licensees.

(6) Security requirements, including, but not limited to,
procedures for limiting access to facilities and for the screening
of employees.

(c) Each mandatory commercial license application approved
by the respective licensing authority pursuant to this chapter is
separate and distinct.

(d)  A mandatory commercial license application approved by
the respective licensing authority pursuant to this chapter shall be
valid for a period not to exceed one year from the date of approval
unless revoked or suspended earlier than that date pursuant to this
chapter or the rules or regulations adopted pursuant to this chapter.

(e) Each regulatory authority may adopt regulations for
additional licenses for any cannabis activity within its statutory
jurisdiction pursuant to this chapter, as deemed necessary.

(f) Each mandatory commercial license application approved
by the respective regulatory authority shall be reported to the
begin delete Division of Medical Cannabis Regulation and Enforcement end delete begin insert division end insert
within 24 hours of its approval.

begin delete

26041.  

Regulations adopted by the regulatory authorities shall
require, at a minimum, all of the following, as applicable:

(a) The Division of Medical Cannabis Cultivation shall adopt
regulations for cultivation of medical cannabis that do all of the
following:

(1) Require that the cultivation licensee comply with all
regulations of the Department of Food and Agriculture pursuant
to this chapter regarding the cultivation of medical cannabis.

(2) Require that the cultivation licensee comply with any other
applicable requirement pursuant to this chapter.

(3) Establish criteria for different tiers of cultivation licenses,
including, but not limited to small, mid-sized, and large commercial
cultivation licenses, based on the area, in square feet, in cannabis
cultivation.

(4) Authorize commercial cultivation licensees to transport and
deliver medical cannabis for commercial purposes to only another
licensee of commercial cannabis activity pursuant to this chapter.
Cultivation licensees, without a separate dispensary license, who
deliver directly to any entity not licensed pursuant to this chapter
shall be fined and be under review for the revocation of licensure
by the Division of Medical Cannabis Cultivation.

(5) Require licensees to track all cannabis products and report
to the division, as specified by this chapter and any regulations
promulgated pursuant to this chapter.

(6) Require a cultivation licensee to obtain a seller’s permit
from the Board of Equalization to validate the authority of the
licensee to sell commercial cannabis products to another licensee
of commercial cannabis activity.

(7) Require a cultivation licensee to obtain a resale certificate
upon the sale of cannabis to another licensee of commercial
cannabis activity, to track the quantities exchanged.

(8) Require all medical cannabis to be tested by a laboratory
that has been certified and licensed pursuant to this chapter, prior
to commercial exchange with a dispensary. If the licensee has a
separate dispensary license, all medical cannabis and medical
cannabis products must be tested by a laboratory that has been
certified and licensed pursuant to this chapter, prior to retail directly
to consumers.

(9) Ensure cultivation licensees have access to existing
agricultural incentive and support programs.

(b) The Division of Medical Cannabis Manufacturing and
Testing shall adopt regulations for testing of medical cannabis that
do all of the following:

(1) Prohibit a testing licensee from receiving medical cannabis
products except through a regulatory authority or a medical
cannabis licensee.

(2) Prohibit a testing licensee from being licensed for any other
activity authorized under this article, and from holding an
ownership interest in any real property, personal property, or other
assets associated or used in any other license category.

(3) Require the licensee to follow any other applicable
requirement of the division pursuant to this chapter.

(c) Regulations on the manufacturing of medical cannabis shall
do all of the following:

(1) Require the manufacturing licensee comply with all
regulations of the State Department of Public Health pursuant to
this chapter regarding the manufacturing and testing of medical
cannabis.

(2) Require the manufacturing licensee comply with any other
applicable requirement pursuant to this chapter.

(3) Establish criteria for different tiers of manufacturing licenses,
including, but not limited to small, mid-sized, and large commercial
manufacturing licenses.

(4) Authorize commercial manufacturing licensees to transport
and deliver medical cannabis for commercial purposes to only
another licensee of commercial cannabis activity pursuant to this
chapter. Manufacturing licensees, without a separate dispensary
license, who deliver directly to any entity not licensed pursuant to
this chapter shall be fined and be under review for the revocation
of licensure by the Division of Medical Cannabis Manufacturing
and Testing.

(5) Require licensees to track all cannabis products and report
to the Division of Medical Cannabis Regulation and Enforcement,
as specified by this chapter and any regulations promulgated
pursuant to this chapter.

(6) Require a manufacturing licensee to obtain a seller’s permit
from the Board of Equalization to validate the authority of the
licensee to sell commercial manufactured cannabis products to
another licensee of commercial cannabis activity.

(7) Require a manufacturing licensee to obtain a resale certificate
upon the sale of manufactured medical cannabis products to another
licensee of commercial cannabis activity, to track the quantities
exchanged.

(8) Require all manufactured medical cannabis and medical
cannabis products to be tested by a laboratory that has been
certified and licensed pursuant to this chapter, prior to commercial
exchange with a dispensary. If the licensee has a separate
dispensary license, all manufactured cannabis and medical cannabis
products shall be tested by a laboratory that has been certified and
licensed pursuant to this chapter, prior to retail sale directly to
consumers.

(d) The division shall adopt regulations for the dispensing of
medical cannabis that do all of the following:

(1) Require the dispensary licensee comply with all regulations
of the division pursuant to this chapter regarding the dispensing
of medical cannabis

(2) Require the dispensary licensee comply with any other
applicable requirements pursuant to this chapter.

(3) Allow dispensary licensees to store limited quantities of
medical cannabis and medical cannabis products for commercial
purposes pursuant to this chapter, in a manner deemed safe and
secure by the regulatory authority.

(4) Allow all non-mobile, non-vehicular, and non-Internet-based
dispensaries to be licensed to transport medical cannabis and
medical cannabis products directly to consumers.

(5) Require all mobile, vehicular and Internet-based dispensaries
to maintain a business contract with a non-vehicular and
non-mobile dispensary, and report all records of commercial
activity to said entity.

(6) Require licensees to track all medical cannabis and medical
cannabis products and report to the division, as specified by this
chapter and any regulations promulgated pursuant to this chapter.

(7) Require all dispensary licensees to obtain a seller’s permit
from the Board of Equalization to validate the authority of the
licensee to sell medical cannabis and medical cannabis products,
and to maintain receipts of all sales transactions.

(8) Require that, upon receipt of medical cannabis, manufactured
medical cannabis, and medical cannabis products, the dispensary
licensee shall request and record evidence that the product has
been tested by a laboratory that has been certified and licensed
pursuant to this chapter.

(e) Regulations for the wholesale of medical cannabis or medical
cannabis products shall do all of the following:

(1) Require all wholesale licensees to comply with all
regulations of the division pursuant to this chapter regarding the
wholesale storage and distribution of medical cannabis.

(2) Require the wholesale licensee comply with any other
applicable requirements of the division pursuant to this chapter.

(3) Establish criteria for the qualifications of a wholesale
licensee, including maximum quantities of medical cannabis that
each licensee may store at one time.

(4) Authorize all wholesale licensees to do commercial business
with only other licensees of commercial cannabis activity. All
other licensees under this chapter shall not be required to work
only with a wholesale licensee directly.

(5) Require that all medical cannabis and medical cannabis
products be tested by a laboratory that has been certified and
licensed pursuant to this chapter prior to commercial exchange
with a dispensary. If the licensee has a separate dispensary license,
all medical cannabis and medical cannabis products must be tested
by a laboratory that has been certified and licensed pursuant to
this chapter, prior to retail directly to consumers.

(6) Require licensees to track all medical cannabis and medical
cannabis products and report to the Division on Medical Cannabis
Regulation and Enforcement, as specified by this chapter and any
regulations promulgated pursuant to this chapter.

(f) All regulations related to transportation of cannabis shall
require a medical cannabis licensee to do all of the following:

(1) Maintain intrastate operating authority.

(2) Maintain interstate operating authority, for the commercial
purposes of the licensee, and only to the extent permitted by federal
law.

(3) Be allowed by local jurisdictions to transport medical
cannabis, if the licensee is in compliance with this chapter.

end delete begin insert

begin insert 26041. end insert   

(a) All licensees authorized by the Division of Medical
Cannabis Cultivation for the cultivation of medical cannabis or
medical cannabis products shall:

(1) Comply with all regulations of the Department of Food and
Agriculture pursuant to this chapter regarding the cultivation of
medical cannabis.

(2) Comply with any other applicable requirements of this
chapter.

(3) Transport only medical cannabis or medical cannabis
products for commercial purposes to only another licensee of
commercial cannabis activity pursuant to this chapter. Cultivation
licensees that deliver directly to any entity not licensed pursuant
to this chapter shall be fined and be under review for the revocation
of licensure by the Division of Medical Cannabis Cultivation.
Licensees that are not authorized to transport live plants explicitly
by their license that transport or deliver live plants shall be fined
and be under review for the revocation of licensure by the Division
of Medical Cannabis.

(4) Track all cannabis products and report to the division, as
specified by this chapter and any regulations promulgated pursuant
to this chapter.

(5) Obtain a seller’s permit from the State Board of Equalization
to validate the authority of the licensee to sell commercial cannabis
products to another licensee of commercial cannabis activity.

(6) Obtain a resale certificate upon the sale of cannabis to
another licensee of commercial cannabis activity, to track the
quantities exchanged.

(7) Test all medical cannabis by a laboratory that has been
certified and licensed pursuant to this chapter, prior to commercial
exchange with a dispensary. If the licensee has a separate
dispensary license, all medical cannabis and medical cannabis
products must be tested by a laboratory that has been certified
and licensed pursuant to this chapter, prior to retail directly to
consumers.

(b) All licensees authorized under the Division of Medical
Cannabis Manufacturing and Testing for the manufacturing or
testing of medical cannabis or medical cannabis products shall:

(1) With regard to testing licensees only:

(A) Not receive medical cannabis or medical cannabis products
except through a regulatory authority or a licensee of commercial
cannabis activity.

(B) Not be licensed for any other activity authorized under this
article, and from holding an ownership interest in any real
property, personal property, or other assets associated or used in
any other license category.

(2) With regard to manufacturing licensees only:

(A) Transport medical cannabis or medical cannabis products
for commercial purposes only to another licensee of commercial
cannabis activity pursuant to this chapter. Manufacturing licensees,
without a separate dispensary license, that deliver directly to any
entity not licensed pursuant to this chapter shall be fined and be
under review for the revocation of licensure by the Division of
Medical Cannabis Manufacturing and Testing.

(B) Obtain a seller’s permit from the State Board of Equalization
to validate the authority of the licensee to sell commercial
manufactured cannabis products to another licensee of commercial
cannabis activity.

(C) Obtain a resale certificate upon the sale of manufactured
medical cannabis products to another licensee of commercial
cannabis activity, to track the quantities exchanged.

(3) With regard to all licensees:

(A) Follow any other applicable requirement of this chapter.

(B) Comply with all regulations of the State Department of
Public Health pursuant to this chapter regarding the manufacturing
and testing of medical cannabis.

(C) Track all medical cannabis and medical cannabis products
and report to the division, as specified by this chapter and any
regulations promulgated pursuant to this chapter.

(D) Test all manufactured medical cannabis by a laboratory
that has been certified and licensed pursuant to this chapter, prior
to commercial exchange with a dispensary. If the licensee has a
separate dispensary license, all medical cannabis and medical
cannabis products must be tested by a laboratory that has been
certified and licensed pursuant to this chapter, prior to retail
directly to consumers.

(c) All licensed authorized by the division shall:

(1) Comply with all regulations of the division pursuant to this
chapter regarding the dispensing of medical cannabis.

(2) Comply with any other applicable requirements of this
chapter.

(3) Track all medical cannabis and medical cannabis products
and report to the division, as specified by this chapter and any
regulations promulgated pursuant to this chapter.

(4) Licenses that are authorized to deliver medical cannabis
and medical cannabis products may deliver medical cannabis and
medical cannabis products that have been prepared in compliance
with this chapter directly to qualified patients and primary
caregivers.

(5) Test all medical and medical cannabis products by a
laboratory that has been certified and licensed pursuant to this
chapter prior to commercial exchange with a dispensary. If the
licensee has a separate dispensary license, all medical cannabis
and medical cannabis products must be tested by a laboratory that
has been certified and licensed pursuant to this chapter, prior to
retail directly to consumers.

(6) With regard to dispensary licensees only:

(A) Dispensary licensees may store limited quantities of medical
cannabis and medical cannabis products, as determined by the
division for commercial purposes pursuant to this chapter, in a
manner deemed safe and secure by the division.

(B) Out-of-state medical cannabis patients with current, valid
verification that they are allowed to receive medical cannabis
treatment within their home state may receive medical cannabis
treatment, including the ability to purchase medical cannabis from
licensed dispensaries within this state upon verification of the
documents by the dispensary, pursuant to protocols established
by the division, and in accordance with this chapter.

(C) Obtain a seller’s permit from the Board of Equalization to
validate the authority of the licensee to sell medical cannabis and
medical cannabis products, and to maintain receipts of all sales
transactions.

(D) Upon receipt of medical cannabis, manufactured medical
cannabis, and medical cannabis products, request and record
evidence that the product has been tested by a laboratory that has
been certified and licensed pursuant to this chapter.

(E) Provide patients with detailed written information about
the contents of the medical cannabis and medical cannabis
products they obtain.

(F) Commencing 180 days after the division begins issuing
provisional licenses, provide patients medical cannabis and
medical cannabis products obtained only from persons licensed
under this chapter.

(G) Be able to demonstrate the present location, amounts, and
descriptions of all medical cannabis and medical cannabis products
from the time of delivery to the dispensary until purchase by a
qualified patient or primary caregiver.

(7) With regard to wholesale licensees only:

(A) Comply with all regulations of the division pursuant to this
chapter regarding the wholesale storage and distribution of
medical cannabis.

(B) Comply with any other applicable requirements of this
chapter.

(C) Wholesale licensees may do commercial business only with
other licensees of commercial cannabis activity. All other licensees
under this chapter shall not be required to work only with a
wholesale licensee directly.

(8) With regard to licensees authorized to transport or deliver
medical cannabis or medical cannabis products:

(A) Maintain intrastate operating authority.

(B) Maintain interstate operating authority, for the commercial
purposes of the licensee, and only to the extent permitted by federal
law.

(C)  Be allowed by local jurisdictions to transport medical
cannabis, if the licensee is in compliance with this chapter.

(D) Only transport or deliver dried flower medical cannabis or
medical cannabis products, unless otherwise specified by their
license.

end insert begin insert

begin insert 26041.5. end insert   

(a) All licensees under this chapter shall:

(1) Abide by the guidelines for the destruction of contaminated,
adulterated, deteriorated, or excess medical cannabis or medical
cannabis product as follows:

(A) Liquid waste shall be disposed of in compliance all
applicable federal, state and local laws, regulations, rules, and
other requirements.

(B) Disposal of chemical, dangerous or hazardous waste shall
be conducted in a manner consistent with federal, state and local
laws, regulations, rules, or other requirements. This may include,
but is not limited to, the disposal of all pesticide or other chemicals
used in the cultivation process, certain solvents or other chemicals
used in the production of medical cannabis concentrate or any
medical cannabis soaked in a flammable solvent for purposes of
producing a medical cannabis concentrate.

(C) All waste, including infused-product waste, shall be made
unusable and unrecognizable prior to leaving the business location
of the licensee. Waste may be made unrecognizable by grinding
and incorporating the medical cannabis waste with
nonconsumable, solid waste, with at least 50 percent of the mixture
being nonmedical cannabis, such as paper, plastic, cardboard,
food, grease or other compostable oil, bokashi or other compost
activators, soil, or any other wastes approved by the regulatory
authorities.

(D) Any other protocols set forth by the regulatory authorities.

(2) Meet minimum advertising, marketing, signage, and lighting
requirements as follows:

(A) Signs or other advertising matter used in connection with
the licensed premises of any licensee shall not be of any obnoxious,
gaudy, blatant, of offensive nature, shall not appeal to minors, and
shall in no manner contrary to the rules of the department obstruct
the view of the interior of the premises from the street.

(B) No more than 33 percent of the square footage of the
windows and clear doors of the business premises of a licensee
shall bear advertising or signs of any sort, and all advertising and
signage shall be placed and maintained in a manner that ensures
that law enforcement personnel have a clear and unobstructed
view of the interior of the premises, including the area in which
the cash registers are maintained, from the exterior public sidewalk
or entrance to the premises. This latter requirement shall not apply
to premises where there are no windows, or where existing
windows are located at a height that precludes a view of the
interior of the premises to a person standing outside the premises.

(C) The exterior of the premises, including adjacent public
sidewalks and all parking lots under the control of the licensee,
shall be illuminated during all hours of darkness during which the
premises are open for business in a manner so that persons
standing in those areas at night are identifiable by law enforcement
personnel. The required illumination shall be placed so as to
minimize interference with the quiet enjoyment of nearby residents
of their property.

(D) Licensees shall abide by all other requirements adopted
through regulation by the regulatory authorities.

(3) Follow all regulations adopted by the regulatory authorities
in order to implement and enforce this chapter.

(b) All licensees may test medical cannabis or medical cannabis
products for the purposes of conducting quality assurance testing.
Tests completed by licensees without a testing license shall not
substitute tests required for commercial cannabis activity under
this chapter. Any licensees found to be substituting tests required
under this chapter with unauthorized tests shall be fined and be
under review for the revocation of licensure by the appropriate
regulatory authority.

end insert

26042.  

Each regulatory authority shall establish appropriate
fees as part of its emergency regulations for the issuance of
provisional licenses adopted pursuant to Section 26043.

26043.  

Each regulatory authority shall adopt, as soon as
practicable, emergency regulations consistent with this chapter to
allow a qualified applicant for licensure to apply for and receive
a provisional license to engage in commercial cannabis activity
so as to ensure an adequate supply of medical cannabis upon full
implementation of this chapter as set forth in Section 26054.

26044.  

Every mandatory commercial license is renewable
unless the license has been revoked if the renewal application is
submitted and the fee for it is paid. A license that has been
suspended, but not revoked, may be renewed under this section,
however, the act of renewal shall not affect the suspension and the
suspension shall remain in effect upon renewal. All licenses expire
at 12 midnight on the last day of the month posted on the license.
All licenses shall be renewed as follows:

(a) The application to renew the license may be filed before the
license expires upon payment of the annual fee.

(b) For 60 days after the license expires, the license may be
renewed upon payment of the annual renewal fee plus a penalty
fee that shall be equal to 50 percent of the annual fee.

(c) Unless otherwise terminated, or unless renewed pursuant to
subdivision (a) or (b), a license that is in effect on the month posted
on the license continues in effect through 12 midnight of the 60th
day following the month posted on the license, at which time it is
automatically canceled.

(d) A license that has been canceled pursuant to subdivision (c)
may be reinstated during the 30 days immediately following
cancellation upon payment by cashier’s check or money order of
the annual renewal fee, plus a penalty fee that shall be equal to
100 percent of the annual fee. A license that has been canceled
pursuant to subdivision (c) and that has not been reinstated within
30 days pursuant to this subdivision is automatically revoked on
the 31st day after the license has been canceled.

(e) A renewal application shall not be deemed filed within the
meaning of this section unless the document itself has been actually
delivered to, and the required renewal fee has been paid at, any
office of the division during office hours, or unless both the
document and fee have been filed and remitted pursuant to Section
11003 of the Government Code.

26045.  

A person may engage in commercial cannabis activity
only if the person has complied with all of the following conditions:

(a)  begin delete The end delete begin insert (1) end insert begin insert   end insert begin insert Except as provided in paragraph (2), the end insert person
has obtained permission from local authorities approving the
proposed commercial cannabis activity. begin delete This requirement shall
not apply to a person who holds a valid business license,
conditional use permit, or other locally issued permit for
commercial cannabis activity. end delete For the purposes of this subdivision,
the document granting the permission shall be issued by the local
authority and include, at a minimum, all of the following:

begin delete

(1)

end delete

begin insert (A) end insert  The legal name, begin delete address end delete begin insert address, end insert and date of birth of the
applicant.

begin delete

(2)

end delete

begin insert (B) end insert  The type of license the applicant is requesting a permit for.

begin delete

(3)

end delete

begin insert (C) end insert  Documentation that the applicant has been in compliance
with local ordinances and regulations, including, but not limited
to, an entity granted immunity under Measure D, approved by the
voters of the City of Los Angeles at the May 21, 2013, general
election.

begin delete

(4)

end delete

begin insert (D) end insert  A statement of whether or not the applicant has previously
committed a felony, as described in paragraph (8) of subdivision
(e) of Section 26047.

begin delete

(5)

end delete

begin insert (E) end insert  A statement signed by the applicant under penalty of perjury
that the information provided in the application is true.

begin insert

(2) Paragraph (1) shall not apply to a person who holds a valid
business license, conditional use permit, or other locally issued
permit for commercial cannabis activity. Those persons who are
applying for licensure in a jurisdiction covered by Measure D,
approved by the voters of the City of Los Angeles at the May 21,
2013, general election, in lieu of the requirement in paragraph
(1), shall provide documentation that the applicant has been in
compliance with the terms of granted immunity under that measure.

end insert

(b) The person submits a copy of the permission, or equivalent
qualifying documents, to the division for recordation. Upon receipt
of an approved permission, the division shall provide the applicant
with a certificate of approval for licensure, to be presented to the
relevant regulatory authority under which the person seeks
licensure. No regulatory authority shall grant approval of an
application without a certificate of approval for application of
commercial cannabis licensure for the applicant.

(c) The person applies for licensure for commercial cannabis
activity from a regulatory authority and receives approval for that
licensure.

(d) The person abides by all local and state ordinances and
regulations pursuant to this chapter.

26046.  

(a) An application for a license shall include, but shall
not be limited to, all of the following:

(1) A certificate of approval for licensure by the Division of
Medical Cannabis Regulation and Enforcement.

(2) The legal name and proposed physical addresses of the
mandatory commercial licensee.

(3) The name, address, and date of birth of each principal officer
and board member.

(4) Operating and inventory control procedures to ensure
security and prevent diversion.

(5) Detailed operating procedures for the proposed facility,
which shall include, but not be limited to, provisions for facility
and operational security, prevention of diversion, employee
screening, storage of medical cannabis, personnel policies, and
recordkeeping procedures.

(6) A list of all persons or entities having an ownership interest
other than a security interest, lien, or encumbrance on any property
that will be used by the applicant.

(7) Evidence of the legal right to occupy and use an established
location, including that if the proposed facility is a cultivator or a
dispensary, that the proposed facility is located beyond at least a
600-foot radius from a school, or an immunity from prosecution
for that occupancy or use pursuant to begin delete a local ordinance or
ordinances, including, but not limited to, end delete Measure D, approved by
the voters of the City of Los Angeles at the May 21, 2013, general
election.

(8) Documentation that the applicant will be in compliance with
all local ordinances and regulations, including, but not limited to,
an entity granted immunity under Measure D, approved by the
voters of the City of Los Angeles at the May 21, 2013, general
election.

(9) Evidence that all of the officers and owners of the applicant
organization have been residents of the State of California for at
least begin delete three years. end delete begin insert the three years prior to the date of applying for
licensure. end insert

(10)  begin insert (A) end insert begin insert   end insert For an applicant with 20 employees or more, a
statement that the applicant will enter into, or demonstrate that it
has already entered into, and abide by the terms of, a begin delete “labor peace
agreement,” as defined by the division in consultation with the
Division of Labor Standards Enforcement. end delete begin insert labor peace agreement. end insert

begin insert

(B) For the purposes of this paragraph, “employee” does not
include any employee who is a supervisor, defined as any
individual having authority, in the interest of the licensee, to hire,
transfer, suspend, lay off, recall, promote, discharge, assign,
reward, or discipline other employees, or responsibility to direct
them or to adjust their grievances, or effectively to recommend
such action, if in connection with the foregoing the exercise of
such authority is not of a merely routine or clerical nature, but
requires the use of independent judgment.

end insert

(11) For an applicant seeking a license to cultivate, a statement
declaring the applicant is an “agricultural employer,” as defined
in the Alatorre-Zenovich-Dunlap-Berman Agricultural Labor
Relations Act of 1975 (Part 3.5 (commencing with Section 1140)
of Division 2 of the Labor Code), to the extent not prohibited by
law.

(12) A statement signed by the applicant under penalty of perjury
that the information provided in the application is true.

begin insert

(13) For an applicant seeking a cultivation or dispensary
license, a notarized statement from the owner of real property or
landlord where the cultivation or dispensing commercial cannabis
activities will occur, as proof to demonstrate the landowner has
acknowledged and consented to permit cultivation or dispensary
activities to be conducted on the property by the tenant applicant.

end insert

(b) For applicants seeking a license to cultivate and manufacture,
the application shall also include a detailed description of the
operating procedures for all of the following:

(1) Cultivation.

(2) Extraction and infusion methods.

(3) The transportation process.

(4) Inventory procedures.

(5) Quality control procedures.

26047.  

(a) Upon receipt of an application for licensure and
the applicable fee, the respective regulatory authority shall make
a thorough investigation to determine whether the applicant and
the premises for which a license is applied qualify for the license
and whether this chapter has been complied with, and shall
investigate all matters connected therewith that may affect the
public welfare and morals.

(b) The respective regulatory authority shall deny an application
if either the applicant or the premises for which a license is applied
do not qualify for licensure under this chapter.

(c) The respective regulatory authority may place reasonable
conditions upon licensure if grounds exist for denial of the license,
and the division finds those grounds may be removed by the
imposition of those conditions. However, the limitations set forth
in paragraph (10) of subdivision (d) shall not be waived.

(d) The respective regulatory authority shall deny the application
for licensure or renewal, or suspend or revoke a license, if any of
the following conditions apply:

(1) Granting or continuation of a license would be contrary to
the public welfare or morals.

(2) The applicant holding or seeking a license has violated any
law prohibiting conduct involving moral turpitude.

(3) Local agencies have notified the division and provided
evidence that a licensee or applicant within its jurisdiction is in
violation of local ordinances relating to cannabis activities.

(4) The application has failed to state with sufficient specificity
the jurisdiction begin delete in end delete begin insert and location at end insert which the applicant proposes to
establish operations.

(5) The applicant fails to meet the requirements of this chapter
or any regulation adopted pursuant to this chapter, or any applicable
city or county ordinance or regulation.

(6) The applicant, or any of its officers, directors, or owners, is
under 21 years of age.

begin insert

(7) The applicant fails to provide notarized written proof that
the owner of real property or landlord has acknowledged and
consented to its tenant’s proposed cultivation or dispensing of
medical cannabis or medical cannabis products.

end insert begin delete

(7)

end delete

begin insert (8) end insert  The applicant has knowingly answered a question or request
for information falsely on the application form or failed to provide
information requested.

begin delete

(8)

end delete

begin insert (9) end insert  The applicant, or any of its officers, directors, or owners has
been convicted of a felony criminal conviction for drug begin delete trafficking, end delete
begin insert trafficking involving a minor, felonies subject to enhancements
Section 13370.4 or 11379.8 of the Health and Safety Code, end insert a
violent felony, as specified in subdivision (c) of Section 667.5 of
the Penal Code, a serious felony as specified in subdivision (c) of
Section 1192.7 of the Penal Code, a felony offense involving fraud
or deceit, or any other felony that, in the division’s determination,
would impair the applicant’s ability to appropriately operate as a
mandatory commercial licensee. The respective regulatory authority
may, at its discretion, issue a license to an applicant that has
obtained a certificate of rehabilitation pursuant to Section 4852.13
of the Penal Code.

begin delete

(9)

end delete

begin insert (10) end insert  The applicant, or any of its officers, directors, or owners
is a licensed physician making patient recommendations for
medical cannabis.

begin delete

(10)

end delete

begin insert (11) end insert  The applicant, or any of its officers, directors, or owners
has been sanctioned by a regulatory authority, a city, or a county
for unlicensed commercial medical cannabis activities or has had
a license revoked under this chapter in the previous three years.

begin insert

(12) The applicant, or any of its officers, directors, or owners,
has been subject to fines or penalty for cultivation or production
of a controlled substance on public or private lands pursuant to
Section 12025 of the Fish and Game Code.

end insert begin insert

(13) The proposed commercial cannabis activity will violate
any applicable local law or ordinance.

end insert begin insert

(14) The applicant has had 20 employees or more in the past
year and failed to enter into a labor peace agreement.

end insert begin delete

(11)

end delete

begin insert (e) end insert  Applicants shall be notified of a denied application in writing
via personal service or mail addressed to the address of the
applicant or licensee set forth in the application. The denial letter
shall contain the detailed reasons for which the application has
been denied. The applicant shall have the right to appeal the denial
and be given a hearing within 30 days of the appeal. On appeal,
the decision shall be upheld unless the applicant demonstrates that
the applicant is in fact eligible for licensure and the application is
in compliance with this chapter.

26048.  

(a) The respective regulatory authority shall
electronically submit to the Department of Justice fingerprint
images and related information for all applicants for cultivation,
dispensing, manufacturing, and transportation licenses for the
purpose of obtaining information as to the existence and content
of a record of state or federal convictions and arrests, and
information regarding whether the person is free on bail, or on his
or her own recognizance, pending trial or appeal.

(b) The Department of Justice shall provide a response to the
division pursuant to paragraph (1) of subdivision (p) of Section
11105 of the Penal Code.

(c) The division shall request from the Department of Justice
subsequent notification service, as provided pursuant to Section
11105.2 of the Penal Code, for persons described in this section.

(d) The Department of Justice shall charge a fee sufficient to
cover the reasonable cost of processing the requests described in
this section.

26049.  

(a) The actions of a mandatory commercial licensee
or provisional licensee, its employees, and its agents, permitted
pursuant to a mandatory commercial license or provisional license
issued by the begin delete division or otherwise permitted by this chapter, end delete
begin insert regulatory authority end insert that are within the scope of the license issued
pursuant to this chapter and the regulations adopted pursuant to
the authority granted by this chapter, are not unlawful under state
begin delete law end delete begin insert law, end insert and shall not be an offense subject to arrest, prosecution,
or other sanction under state law, or be subject to a civil fine or be
a basis for seizure or forfeiture of assets under begin insert state end insert law.

(b) The actions of a person who, in good faith and upon
investigation, allows his or her property to be used by a mandatory
commercial licensee or provisional licensee, its employees, and
its agents, as permitted pursuant to a mandatory commercial license
or provisional license issued by the division or otherwise permitted
by this chapter, are not unlawful under state law and shall not be
an offense subject to arrest, prosecution, or other sanction under
state law, or be subject to a civil fine or be a basis for seizure or
forfeiture of assets under state law.

(c) Conduct that is within the scope of a license issued pursuant
to this chapter begin insert and permitted by local ordinance end insert but not fully in
compliance with this chapter shall be subject to the enforcement
provisions of this chapter and shall not be subject to the penal
provisions begin insert of state law end insert generally prohibiting cannabis-related
activity, unless and until the license is revoked.

(d) This section shall not be deemed to limit the authority or
remedies of a city or county under any provision of law, including,
without limitation, Section 7 of Article XI of the California
Constitution or Section 26010 or 26060.

26050.  

(a) A licensee shall keep, at the licensed premises,
accurate records of the specific commercial cannabis activity
conducted by the licensee. The records shall include, at a minimum,
all of the following for each batch of product:

(1) The name and address of the supplier.

(2) The dates on which the product was received.

(3) The amounts, form, and batch and lot number.

(4) The location of the cultivation site.

(5) The name of the employee who received the product.

(6) Records demonstrating compliance by the licensee with state
and federal rules and regulations regarding reporting and taxation
of income received.

begin insert

(7) Receipts for all expenditures incurred by the registrant and
banking records, if any, for all funds obtained or expended in the
performance of any activity under the authority of the registration.

end insert

(b) The records shall be kept for a minimum of seven years.

(c)  begin delete The division end delete begin insert Regulatory authorities and any relevant local
agency end insert may make any examination of the books and records of
any licensee and may visit and inspect the premises of any licensee
that the begin delete division end delete begin insert regulatory authority or local agency end insert may deem
necessary to perform begin delete its end delete begin insert their end insert duties under this begin delete chapter. end delete begin insert chapter
or local ordinance. end insert

(d) If the licensee or any employee of the licensee refuses,
impedes, obstructs, or interferes with an inspection pursuant to
this chapter or local ordinance, or if the licensee fails to maintain
or provide the books and records required by this section, the
license may be summarily suspended and the division shall directly
commence proceedings for the revocation of the license in
accordance with this chapter.

(e) All cultivation, dispensing, and retail sales licensees shall
be subject to an annual audit, as specified by the regulatory
authority, in order to ensure proper documentation is kept at each
site or facility. The reasonable costs of the audit shall be paid for
by the licensee.

26052.  

(a) This chapter shall not apply to, and shall have no
diminishing effect on, the begin delete rights and end delete protections granted to a patient
or a primary caregiver pursuant to the Compassionate Use Act of
1996.

(b) (1) A patient who cultivates, possesses, stores, manufactures,
or transports cannabis exclusively for his or her personal medical
use but who does not begin delete sell or end delete begin insert provide, donate, sell, or end insert distribute
cannabis to any other person is not, thereby, engaged in commercial
cannabis activity and is, therefore, exempt from the licensure
requirements of this chapter.

(2) A primary caregiver who cultivates, possesses, stores,
manufactures, transports, donates, or provides cannabis exclusively
for the personal medical purposes of begin delete a end delete begin insert no more than five end insert specified
qualified patient for whom he or she is the primary caregiver within
the meaning of Section 11362.7 of the Health and Safety Code but
who does not receive remuneration for these activities except for
compensation in full compliance with subdivision (c) of Section
11362.765 of the Health and Safety Code is not, thereby, engaged
in commercial cannabis activity and is, therefore, exempt from the
licensure requirements of this chapter.

begin insert

(c) Exemption from the license requirements of this part shall
not limit or prevent a city, county, or city and county from
regulating or banning the cultivation, storage, manufacture,
transport, provision, or other activity by the exempt person, or
impair the enforcement of that regulation or ban.

end insert

26054.  

(a) Each regulatory authority shall, as soon as
practicable following January 1, 2016, allow a qualified applicant
for licensure to apply for and receive a provisional license to
engage in commercial cannabis activity so as to ensure an adequate
supply of medical cannabis upon full implementation of this
chapter.

(b) Each regulatory authority shall establish appropriate fees
not to exceed the reasonable regulatory costs to the regulatory
authority for the issuance of a provisional license under its
jurisdiction pursuant to this chapter.

(c) Each regulatory authority shall, if the applicant meets all the
requirements in this section, issue a provisional license to
individuals and entities that the regulatory authority determines
were, during the begin delete 3 end delete begin insert three end insert months prior to January 1, 2016, regularly
cultivating, processing, manufacturing, transporting, or distributing
medical cannabis collectively or cooperatively in full compliance
with any applicable local ordinance, to continue to do so until the
licensee’s application for mandatory commercial licensure has
been approved or denied under this chapter, but no later than 90
days after the regulatory authority begins accepting applications
for regular mandatory commercial licenses. The regulatory
authority may consult with relevant local agencies in making a
determination on whether a provisional license applicant is in
compliance with any applicable ordinance.

(d) To qualify for a provisional mandatory commercial license,
applicants shall disclose to the appropriate regulatory authority all
of the following information in writing:

(1) The names, addresses, and dates of birth of each principal
officer, owner, or board member.

(2) The common street address and assessor’s parcel number
of the property at which the licensee conducts any activity under
the authority of the licensee.

(3) The common street address and assessor’s parcel number
of the property at which any cultivation activity was or is to be
conducted.

(4) For the begin delete 3 end delete begin insert three end insert months prior to January 1, 2016, the quantity
of cannabis cultivated, processed, manufactured, tested, transported,
or sold at a location and the quantity expected to be cultivated,
processed, manufactured, tested, transported, or sold from January
1, 2016, to July 1, 2016, inclusive. The licensee shall make its
records of current activity and activity for the begin delete 3 end delete begin insert three end insert months prior
to January 1, 2016, available to the division upon request.

begin insert

(5) For an applicant seeking a cultivation or dispensary license,
a notarized statement from the owner of real property or landlord
where the cultivation or dispensing commercial cannabis activities
will occur, as proof to demonstrate the landowner has
acknowledged and consented to permit cultivation or dispensary
activities to be conducted on the property by the tenant applicant.

end insert

(e) Upon receipt of the application materials and fee, the division
shall issue a provisional license and send a proof of issuance to
the applicant that meets all the requirements of this section, if the
applicant has not committed any act or crime constituting grounds
for the denial of licensure.

(f) Notwithstanding any other provision of this section, the
division shall not issue a provisional license to an individual or
entity, or for a premises, against whom there are pending state or
local administrative or judicial proceedings or actions initiated by
a city, county, or city and county under any applicable local
ordinance or who has been determined through those proceedings
to have violated any local ordinance related to cannabis activity,
or that knowingly provides false or fraudulent information on an
application for licensure.

(g) Entities that are provided immunity under Measure D,
approved by the voters of the City of Los Angeles at the May 21,
2013, general election, shall be considered the equivalent of entities
that are registered, permitted, or licensed as a medical marijuana
business, dispensary, or other entity involved in providing medical
marijuana to patients under a local ordinance and shall be
considered in compliance with a local ordinance for the purposes
of the implementation of this section.

(h) Provisional licensees shall comply with all standards and
requirements applicable to a licensee under this chapter, including,
but not limited to, the production, recordkeeping, security, and
transportation requirements and standards.

(i) Beginning July 1, 2017, all commercial cannabis activity
shall be conducted between licensees of commercial cannabis
activity, pursuant to this chapter. If the regulatory authorities have
not promulgated their respective regulations by that date, the
regulatory authorities shall provide an extension for all provisional
licenses for applicants abiding by the provisions of this chapter.

26055.  

The regulatory authority may adopt regulations to
permit the transfer of a license from a licensee to another person
who demonstrates to the regulatory authority that he or she is
eligible for licensure under this chapter, if the prospective recipient
of the license complies with all of the requirements of this chapter
relating to a new application for licensure, including, but not
limited to, payment to the regulatory authority of a reasonable
license transfer fee.

26057.  

Each regulatory authority shall make recommendations
to the Legislature pertaining to the establishment of an appeals
and judicial review process for persons aggrieved by a final
decision of the regulatory authority.

 

Article 4.  Enforcement

 

26060.  

(a) Each regulatory authority shall work in conjunction
with law enforcement agencies for the purposes of implementing,
administering, and enforcing this chapter and any regulations
adopted pursuant to this chapter and taking appropriate action
against licensees and others who fail to comply with this chapter
or the regulations adopted pursuant to this chapter.

(b) Nothing in this chapter or in Article 2 (commencing with
Section 11357) or Article 2.5 (commencing with Section 11362.7)
of Chapter 6 of Division 10 of the Health and Safety Code, shall
prevent a city, county, or city and county from adopting or
enforcing a zoning ordinance or other law, ordinance, or regulation
that begin insert bans or end insert regulates the location, operation, or establishment of
a licensee or other person that engages in commercial cannabis
activity.

26062.  

Except for a person identified in Section 26052, a person
shall not exercise the privilege or perform any act that a licensee
may exercise or perform under the authority of a license unless
the person is acting pursuant to a license, including, but not limited
to, a provisional license issued pursuant to this chapter.

26064.  

Any person engaging in commercial cannabis activity
and operating an unlicensed facility, building, structure, vehicle,
mobile unit, or location in violation of this chapter shall be subject
to civil penalties of up to twice the amount of the license fee for
each violation, and the division or court may order the destruction
of any cannabis associated with that violation. begin insert Each day of
operation shall constitute a separate violation of this section. end insert All
civil fines begin insert imposed and end insert collected pursuant to this section shall be
deposited into the fines and penalties account established pursuant
to Section 26028. If an action for civil penalties is brought by the
Attorney General, the penalty collected shall be deposited into the
General Fund pursuant to Section 26028. If the action is brought
by a district attorney or county counsel, the penalty collected shall
be paid to the treasurer of the county in which the judgment was
entered. If the action is brought by a city attorney or city
prosecutor, the penalty collected shall be paid to the treasurer of
the city in which the judgment was entered.

26066.  

(a) Any regulatory director or any district attorney,
county counsel, city attorney, or city prosecutor may bring an
action in the name of the people of the State of California to enjoin
a violation or the threatened violation of any provision of this
chapter, including, but not limited to, a licensee’s failure to correct
objectionable conditions following notice or as a result of any rule
promulgated pursuant to this chapter, and to assess and recover
civil penalties in accordance with this chapter. The action shall be
brought in the county in which the violation occurred or is
threatened to occur. Any proceeding for injunctive relief brought
pursuant to this chapter shall conform to the requirements of
Chapter 3 (commencing with Section 525) of Title 7 of Part 2 of
the Code of Civil Procedure.

(b) A state or local agency shall immediately notify the division
and the appropriate regulatory authority of any violations or arrests
made for violations over which the division or regulatory authority
has jurisdiction which involve a licensee or licensed premises.
Notice shall be given within 10 days of the violation or arrest. The
division or regulatory authority shall promptly cause an
investigation to be made as to whether grounds exist for suspension
or revocation of the license.

(c) This chapter shall not be construed to limit a law enforcement
agency’s ability to investigate unlawful activity in relation to a
mandatory commercial licensee.

(d) The division shall keep a complete record of all entities
licensed pursuant to this chapter. This record shall be made
available to state and local law enforcement to verify a mandatory
commercial license.

(e) A city, county, or city and county may impose a temporary
local suspension of the license of a commercial licensee for up to
30 days for violations of this chapter or a local ordinance. The
regulatory authority shall promptly cause an investigation to be
made as to whether grounds exist for continued suspension or
revocation of the license. If the regulatory authority has not
completed its investigation or disciplinary action within 30 days,
a city, county, or city and county may impose a subsequent
temporary local suspension of the license of a commercial licensee
for the same violation until the regulatory authority’s investigation,
the suspension or revocation, and all appeals to that suspension or
revocation are complete. This subdivision shall not limit a city’s,
county’s, or city and county’s authority to enforce laws or
ordinances pursuant to the authority granted by Section 7 of Article
XI of the California Constitution.

 

Article 5.  Transportation of Medical Cannabis

 

26100.  

A licensee authorized to begin delete transport end delete begin insert transport, or
transport and deliver, end insert medical cannabis and medical cannabis
products shall do so only as set forth in this chapter.

26102.  

(a) Prior to transporting begin insert or delivering end insert medical cannabis
or medical cannabis products, a licensee authorized to transport
begin insert or deliver, end insert medical cannabis or medical cannabis products shall
do both of the following:

(1) Complete an electronic shipping manifest as prescribed by
the division. begin insert All delivery shipping manifests shall not identify the
qualified patient or primary caregiver by name or address. end insert

(2) Securely transmit the manifest to the division and the
licensee that will receive the medical cannabis begin delete product. end delete begin insert product,
as applicable. end insert

(b) During begin delete transportation, end delete begin insert transportation or delivery, end insert the
licensed transporter shall maintain a physical copy of the shipping
manifest and make it available upon request to agents of the
division, local law enforcement officers, or any other designated
enforcement agency.

(c) The licensee receiving the shipment shall maintain each
electronic shipping manifest and shall make it available upon
request to agents of the division, local law enforcement officers,
or any other designated enforcement agency.

(d) Upon receipt of the begin insert transported end insert shipment, a licensed facility
shall submit to the division a record verifying receipt of the
shipment and the details of the shipment.

26104.  

(a) Transported begin insert and delivered end insert medical cannabis or
medical cannabis products shall be transported only in a storage
compartment that is securely affixed to the interior of the
transporting vehicle, and shall not be visible from outside the
vehicle. This requirement shall only apply to licensees transporting
medical cannabis or medical cannabis products with a total retail
value of begin delete over five hundred dollars ($500). end delete begin insert at least an amount equal
to a statewide monetary threshold, which shall be adopted by
regulation by the regulatory authorities after review by the task
force and regulatory authorities. end insert

(b) A vehicle transporting begin insert medical cannabis or end insert medical cannabis
products shall travel only directly between licensed facilities, unless
otherwise authorized under its license.

(c) All transport begin insert or delivery end insert vehicles shall be staffed with a
minimum of two employees. At least one transport member shall
remain with the vehicle at all times when the vehicle contains
medical cannabis. This requirement shall only apply to licensees
transporting medical cannabis or medical cannabis products with
a total retail value of begin delete over five thousand dollars ($5,000). end delete begin insert at least
an amount equal to a statewide monetary threshold, which shall
be adopted by regulation by the regulatory authorities after review
by the task force and regulatory authorities. end insert

(d) Each transport begin insert or delivery end insert team member shall possess
documentation of licensing and a government-issued identification
card at all times when transporting or delivering medical cannabis
and shall produce it upon the request of agents of any regulatory
authority or any law enforcement officials.

26105.  

(a) The division shall develop a database containing
the electronic shipping manifests, which shall include, but are not
limited to, the following information:

(1) The quantity, or weight, and variety of products shipped.

(2) The estimated times of departure and arrival.

(3) The quantity or weight, and variety of products received.

(4) The actual time of arrival.

(5) A categorization of the product.

(b) The database shall be designed to flag irregularities for any
regulatory authority to investigate. Any regulatory authority may,
at any time, inspect shipments and request documentation for
current inventory.

begin insert

begin insert 26106. end insert   

(a) This chapter shall not be construed to authorize
or permit any licensee to transport or deliver, or cause to be
transported or delivered, cannabis or cannabis products outside
the state, unless authorized by federal law.

(b) A local jurisdiction shall not prevent transportation of
medical cannabis or medical cannabis products on public roads
by a licensee transporting medical cannabis or medical cannabis
products that acts in compliance with this chapter.

(c) A local jurisdiction shall not prevent delivery of medical
cannabis or medical cannabis products on public roads by a
licensee delivering medical cannabis or medical cannabis products
that acts in compliance with this chapter and eligible local
ordinances.

end insert begin insert

begin insert 26107. end insert   

(a) All mobile, vehicular, and Internet-based-delivery
services are prohibited except as authorized by this chapter.

(b) Upon approval of the division, a licensee registered to
provide delivery services, shall abide by the following conditions
of the license:

(1) The city or county in which the licensed premises of the
licensee are located, and in which each delivery is made must
specifically permit delivery service by ordinance referring to this
section.

(2) Transportation of medical cannabis or medical cannabis
products for delivery under this section shall comply with
subdivisions (b) and (c) of Section 26102 and subdivisions (a), (c),
and (d) of Section 26104.

(3) All employees delivering medical cannabis or medical
cannabis products must carry a current license authorizing those
services with them during deliveries, and must present them upon
request to state and local law enforcement, employees of regulatory
authorities, and other state and local agencies enforcing this
chapter.

(c) Cities and counties shall have the authority to impose a tax,
pursuant to Section 23028 of the Government Code, on each
delivery transaction completed by an authorized licensee.

(d) Whenever a regulatory authority has knowledge that a
licensed facility has transported or delivered, or arranged or
facilitates the transport or delivery of, medical cannabis or medical
cannabis products in violation of this chapter, the regulatory
authority shall summarily suspend the license of that facility and
shall without delay commence proceedings for the revocation of
the license in accordance with this part.

end insert

 

Article 6.  Cannabis Employee Certification and Apprenticeship
Program for Cultivation Sites and Dispensaries

 

26140.  

This article applies only to cultivation sites and
dispensaries.

26140.5.  

The Division of Labor Standards Enforcement shall
do all of the following:

(a) Maintain minimum standards for the competency and training
of employees of a licensed cultivator or dispensary through a
system of testing and certification.

(b) Maintain an advisory committee and panels as necessary to
carry out its functions under this article. There shall be employer
representation on the committee and panels.

(c) Adopt regulations as determined to be necessary to
implement this article.

(d) Issue certification cards to employees certified pursuant to
this article.

(e) Establish registration fees in an amount reasonably necessary
to implement this article, not to exceed twenty-five dollars ($25)
for the initial registration. There shall be no fee for annual renewal
of registration. begin delete Fees shall be placed in the fund. end delete begin insert Fees collected for
cultivation sites and dispensaries shall be placed into the Medical
Cannabis Cultivation Fee Account and the Medical Cannabis
Retail Fee Account, respectively. end insert

26141.  

(a) By January 1, 2017, the Division of Labor Standards
Enforcement shall develop a certification program for cannabis
employees. Commencing January 1, 2019, except as provided in
subdivision (c), certification shall be required of all persons who
perform work as cannabis employees.

(b) Individuals desiring to be certified shall submit an
application for certification and examination.

(c) (1) Certification is not required for registered apprentices
working as cannabis employees as part of a state-approved
apprenticeship program. An apprentice who is within one year of
completion of his or her term of apprenticeship shall be permitted
to take the certification examination and, upon passing the
examination, shall be certified immediately upon completion of
the term of apprenticeship.

(2) Commencing January 1, 2019, an uncertified person may
perform work for which certification is otherwise required in order
to acquire the necessary on-the-job experience for certification
provided that the person shall be under the direct supervision of a
cannabis employee certified pursuant to Section 26141 who is
responsible for supervising no more than one uncertified person.

(3) The Division of Labor Standards Enforcement may develop
additional criteria governing this subdivision.

26141.5.  

(a) The following shall constitute additional grounds
for disciplinary proceedings, including suspension or revocation
of the license issued pursuant to this chapter:

(1) The licensee willfully employs one or more uncertified
persons to perform work as cannabis employees in violation of
this section.

(2) The licensee willfully fails to provide adequate supervision
of uncertified workers.

(3) The licensee willfully fails to provide adequate supervision
of apprentices performing work pursuant to paragraph (1) of
subdivision (c) of Section 26141.

(b) The Labor Commissioner shall maintain a process for
referring cases to the appropriate regulatory authority when it has
been determined that a violation of this section has likely occurred.
The Labor Commissioner shall have a memorandum of
understanding with the regulatory authorities in furtherance of this
section.

(c) Upon receipt of a referral by the Labor Commissioner
alleging a violation under this section, the appropriate regulatory
authority shall open an investigation. Disciplinary action against
the licensee shall be initiated within 60 days of the receipt of the
referral. The regulatory authority may initiate disciplinary action
against a licensee upon his or her own investigation, the filing of
a complaint, or a finding that results from a referral from the Labor
Commissioner alleging a violation under this section. Failure of
the employer or employee to provide evidence of certification or
apprentice status shall create a rebuttable presumption of violation
of this provision.

(d) This section shall become operative on January 1, 2019.

SEC. 6.  

Section 23028 is added to the Government Code, to
read:

23028.  

(a) (1) In addition to any authority otherwise provided
by law, the board of supervisors of any begin delete county end delete begin insert county, and the city
council of any city, end insert may impose, by ordinance, a tax on the
privilege of cultivating, dispensing, producing, processing,
preparing, storing, providing, donating, selling, or distributing
cannabis by a licensee operating pursuant to the Medical Cannabis
Regulation and Control Act (Chapter 18 (commencing with Section
26000) of Division 9 of the Business and Professions Code). The
tax may be imposed for general governmental purposes or for
purposes specified in the ordinance by the board of supervisors.

(2) The board of supervisors begin insert or city council end insert shall specify in the
ordinance proposing the tax the activities subject to the tax, the
applicable rate or rates, the method of apportionment, and the
manner of collection of the tax. A tax imposed pursuant to this
section is a tax and not a fee or special assessment, and the tax is
not required to be apportioned on the basis of benefit to any person
or property or be applied uniformly to all taxpayers or all real
property.

(3) A tax imposed by a county begin insert or city end insert pursuant to this section
begin delete by a county end delete may include a transactions and use tax imposed solely
for begin insert medical end insert cannabis or begin insert medical end insert cannabis products, which shall
otherwise conform to Part 1.6 (commencing with Section 7251)
of Division 2 of the Revenue and Taxation Code. Notwithstanding
Section 7251.1 of the Revenue and Taxation Code, the tax may
be imposed at any rate specified by the board of begin delete supervisors, end delete
begin insert supervisors or city council, end insert and the tax rate authorized by this
section shall not be considered for purposes of the combined tax
rate limitation established by that section.

(4) The tax authorized by this section may be imposed upon
any or all of the activities set forth in paragraph (1), regardless of
whether the activity is undertaken individually, collectively, or
cooperatively, and regardless of whether the activity is for
compensation or gratuitously, as determined by the board of
supervisors.

(5) The board of supervisors begin insert or city council end insert shall specify whether
the tax applies throughout the entire county begin insert or city, end insert or within the
unincorporated area of the begin insert city or end insert county.

(b) In addition to any other method of collection authorized by
law, the board of supervisors begin insert or city council end insert may provide for the
collection of the tax imposed pursuant to this section in the same
manner, and subject to the same penalties and priority of lien, as
other charges and taxes fixed and collected by the begin insert city or end insert county.

(c) Any tax imposed pursuant to this section shall be subject to
applicable voter approval requirements imposed by any other law.

(d) For purposes of this section, “marijuana” or “cannabis” shall
have the meanings set forth in Section 26002 of the Business and
Professions Code.

(e) This section begin insert is declaratory of existing law and end insert does not limit
or prohibit the levy or collection or any other fee, charge, or tax,
or any license or service fee or charge upon, or related to, the
activities set forth in subdivision (a) as otherwise provided by law.
This section shall not be construed as a limitation upon the taxing
authority of any county as provided by other law.

begin delete

(f) The total taxation of state and local authorities shall not be
in excess of 25 percent of retail prices.

end delete

SEC. 7.  

Section 11362.775 of the Health and Safety Code is
amended to read:

11362.775.  

(a) Subject to subdivision (b), qualified persons
with valid identification cards, and the designated primary
caregivers of qualified patients and persons with identification
cards, who associate within the State of California in order begin insert to end insert
collectively or cooperatively begin delete to end delete cultivate marijuana for medical
purposes, shall not solely on the basis of that fact be subject to
state criminal sanctions under Section 11357, 11358, 11359, 11360,
11366, 11366.5, or 11570.

(b) Commencing 180 days following the issuance of provisional
licenses pursuant to the Medical Cannabis Regulation and Control
Act (Chapter 18 (commencing with Section 26000) of Division 9
of the Business and Professions Code), subdivision (a) shall not
apply to licensees under that act or to any persons who collectively
or begin delete cooperative end delete begin insert cooperatively end insert cultivate marijuana for medical
purposes. Each regulatory authority shall post a notice on its
Internet Web site indicating when it has commenced issuing
provisional licenses and when the 180-day period has been
exhausted.

SEC. 8.  

Section 147.5 is added to the Labor Code, to read:

147.5.  

(a) By January 1, 2017, the Division of Occupational
Safety and Health shall convene an advisory committee to evaluate
whether there is a need to develop industry-specific regulations
related to the activities of facilities issued a license pursuant to
Chapter 18 (commencing with Section 26000) of Division 9 of the
Business and Professions Code.

(b) By July 1, 2017, the advisory committee shall present to the
board its findings and recommendations for consideration by the
board. By July 1, 2017, the board shall render a decision regarding
the adoption of industry-specific regulations pursuant to this
section.

SEC. 9.  

Section 3094 is added to the Labor Code, to read:

3094.  

The Division of Apprenticeship Standards shall
investigate, approve, or reject applications for apprenticeship
programs for employees of a licensee subject to Article 6
(commencing with Section 26140) of Chapter 18 of Division 9 of
the Business and Professions Code. The Division of Apprenticeship
Standards shall adopt regulations necessary to implement and
regulate the establishment of the apprenticeship programs described
in this section.

SEC. 10.  

The provisions of this act are severable. If any
provision of this act or its application is held invalid, that invalidity
shall not affect other provisions or applications that can be given
effect without the invalid provision or application.

SEC. 11.  

The Legislature finds and declares that Section 5 of
this act, which adds Chapter 18 (commencing with Section 26000)
to Division 9 of the Business and Professions Code, imposes a
limitation on the public’s right of access to the meetings of public
bodies or the writings of public officials and agencies within the
meaning of Section 3 of Article I of the California Constitution.
Pursuant to that constitutional provision, the Legislature makes
the following findings to demonstrate the interest protected by this
limitation and the need for protecting that interest:

It is necessary to maintain the confidentiality of patient and
physician information provided to the regulatory authorities in
order to protect the private medical information of patients who
use medical cannabis and to preserve the essential confidentiality
of the physician and patient relationship.

SEC. 12.  

No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution for certain
costs that may be incurred by a local agency or school district
because, in that regard, this act creates a new crime or infraction,
eliminates a crime or infraction, or changes the penalty for a crime
or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.

However, if the Commission on State Mandates determines that
this act contains other costs mandated by the state, reimbursement
to local agencies and school districts for those costs shall be made
pursuant to Part 7 (commencing with Section 17500) of Division
4 of Title 2 of the Government Code.